ADVERTISING  AS 
A  BUSINESS  FORCE 


By 
PAUL  TERRY  CHERINGTON 

Of  the  Graduate  School  of  Business  Administration, 
Harvard  University 


"Professor  Cherington's  sources  for  the  book 
are  the  experiences  and  opinions  and  deduc- 
tions of  men  prominent  in  all  lines  of  business, 
as  they  have^  appeared  in  the  pages  of  those 
publications  devoted  to  business  topics.  He 
has  not  started  with  a  pet  theory  and  sought 
only  those  facts  which  would  bear  it  out.  He 
has  gone  after  the  facts  in  the  places  where  the 
facts  were  most  easily  accessible,  and  the 
principles  to  be  deducted  from  them  worth  any 
quantity  of  analyzing.  It  is  always  better  to 
know  what  really  happened  than  to  under- 
stand perfectly  what  should  have  happened  — 
and  didn't  " 

-  Excerpt  from  Editorial  in  Printers'  Ink. 


SHEPARD  HOWLAND 

667  GREEN  ST. 
CAMBRIDGE  (A)  MASS. 


ADVERTISING  AS  A  BUSINESS  FORCE 


ADVERTISING  AS  A 
BUSINESS  FORCE 

A   COMPILATION   OF   EXPERIENCE   RECORDS 

BY 

PAUL  TERRY  CHERINGTON 

INSTRUCTOR   IN   COMMERCIAL   ORGANIZATION   IN   THE   GRADUATE 
SCHOOL    OF    BUSINESS    ADMINISTRATION,    HARVARD    UNIVERSITY 


PUBLISHED   BY 

DOUBLEDAY,  PAGE  &  COMPANY 

FOR 

THE  ASSOCIATED  ADVERTISING  CLUBS 
OF  AMERICA 

1913 


Copyright,  1913,  by 

The  Associated  Advertising  Clubs  of  America 

All  rights  reserved,  including  that  of 

translation  into  foreign  languages, 

including  the  Scandinavian 


^\ZW 


To 
HERBERT  S.  HOUSTON 

CHAIRMAN  OF  THE  EDUCATIONAL  COMMITTEE 

OF  THE 
ASSOCIATED  ADVERTISING  CLUBS  OF  AMERICA 

THIS  BOOK  IS  DEDICATED 


'  Such  earnest  natures  are  the  fiery  -pith. 

The  compact  nucleus.  Wound  which  systems  grow  1 
Mass  after  mass  becomes  inspired  thereunlh. 
And  whirls  impregnate  with  the  central  glow." 


PREEACE 

THE  purpose  of  this  book  is  to  provide  a  text  for  the 
individual  instruction  work  for  the  Educational  Com- 
mittee of  the  Associated  Advertising  Clubs  of  America. 
Throughout  the  work  of  compilation  we  shall  endeavor  to 
keep  strictly  to  this  purpose.  In  the  selection  of  experience 
records  it  will  be  our  aim  to  make  our  choices  primarily  with 
this  object  in  mind.  In  a  choice  between  two  articles  of 
equal  value,  the  availability  of  one  or  the  other  for  individual 
instruction  purposes  will  lead  to  its  selection. 

If  the  book,  in  addition  to  being  useful  for  this  individual  in- 
struction work,  serves  to  put  before  advertisers,  in  a  somewhat 
new  light,  material  with  which  they  are  already  familiar,  we 
shall  be  glad  that  its  usefulness  may  be  thus  extended. 

Again,  if  the  compilation  of  these  experience  records  serves 
to  preserve  from  disappearance,  in  the  files  of  the  publications 
in  which  they  appeared,  some  extremely  valuable  material 
covering  the  development  of  advertising  during  the  last  few 
years,  we  shall  be  glad  that  its  usefulness  has  been  enhanced 
by  that  service  also. 

The  plan  of  the  book  embraces  the  selection  of  records  of 
experience  showing  how  advertising  activities  have  been 
related  to  the  selling  results  they  were  designed  to  produce. 
These  experience  records  will  be  compiled  under  a  few  general 
headings  corresponding  with  chapter  divisions,  and  these 
general  headings  will  be  arranged  in  two  main  groups.  The 
first  of  these  groups  will  discuss  the  organization  of  the  distri- 
bution system  for  handling  goods  sold  ultimately  at  retail,  and 
will  discuss  the  advertising  aspects  of  the  successive  steps  in 
this  system.    Some  attention  also  will  be  given  to  the  changes 


viii  FREFACE— Continued 

in  the  distribution  system  and  the  advertising  aspects  of  the 
new  conditions  resulting  from  these  changes.  The  second  group 
of  chapters  will  be  devoted  to  a  discussion  of  present-day 
advertising  problems  and  methods. 

The  plan  for  the  compilation  provides  for  comparatively 
little  constructive  interpretation  on  the  part  of  the  compiler 
of  the  quotations  selected.  We  shall  aim  to  make  the  quota- 
tions tell  their  own  story  as  far  as  possible.  We  believe  that 
what  we  sacrifice  in  this  way,  in  the  matter  of  unity,  we  shall 
gain  in  preservation  of  freshness  and  variety  of  viewpoint  —  to 
say  nothing  of  the  preservation  of  the  air  of  authority  which 
can  only  come  from  a  much  wider  range  of  knowledge  than  any 
one  person  can  possess. 


We  wish  to  express  our  thanks  to  those  who  have  so  liberally 
assisted  us  in  making  this  compilation.  John  Irving  Romer, 
editor  of  Printers*  Ink,  Le  Roy  Fairman,  editor  of  Advertising 
and  Selling,  and  D.  V.  Casey,  managing  editor  of  System,  we 
wish  to  especially  thank  for  their  cordial  co-operation  in  giving 
us  access  to  their  files,  and  we  wish  to  thank  the  proprietors 
of  each  of  these  magazines  for  permission  to  use  the  material 
which  they  have  published. 

We  wish,  also,  to  acknowledge  our  appreciation  of  the 
extremely  cordial  co-operation  which  we  have  received  in  all 
matters  from  Chairman  Herbert  S.  Houston  of  the  Educational 
Committee,  and  from  the  members  of  the  committee,  who  have 
from  time  to  time  examined  the  work  while  it  was  in  progress 
and  have  been  of  great  assistance  with  their  frank  criticisms 
and  valuable  suggestions. 


CONTENTS 
PART  I 

ADVERTISING   AND   DISTRIBUTION 
CHAPTER  I 

Page 

Selling  Problems  and  the  Advertiser      ...  3 

How  one  advertiser  changed  his  advertising  campaign 
to  fit  the  results  of  an  analysis  of  his  market  — 
Advertising  as  a  business  force  —  The  article,  the 
consumer,  and  the  distribution  system  and  their  place 
in  the  advertising  plan  —  A  method  of  commercial 
analysis  prepared  by  an  advertising  manager  — 
Another  method  prepared  by  an  advertising  agent  — 
How  a  baker  analyzed  the  bread  market  of  New 
York  City  —  The  facts  in  production  and  distribu- 
tion which  govern  the  advertising. 

CHAPTER  II 

The  Distribution  System 29 

The  main  steps  in  the  distribution  system  for  goods 
finally  sold  at  retail  —  The  conflict  between  the 
various  parts  of  the  system  —  Manufacturers  who 
avoid  jobbing  —  Jobbers  who  manufacture  —  Re- 
tailers who  buy  direct  —  Retailers  who  cannot  buy 
except  through  jobbers  —  The  resulting  disorder  — 
The  effect  on  advertising  —  The  dilemma  of  the 
retailer  —  The  strength  of   the   retailer's  position. 


X  CONTENTS— Conimwed 

CHAPTER  III 

PAGE 

The  Relation  of  Advertising  to  the  Distribution 

System 47 

What  to  do  before  advertising  —  Sales  possibilities 
and  sales  methods  —  Developing  sales  possibilities 
by  advertising  —  Effect  of  advertising  on  adver- 
tisability  of  goods  —  Effects  of  advertising  on  un- 
advertised  goods  —  Advertising  and  its  effects  on 
demand  and  distribution  —  Weak  links  in  big 
campaigns. 

CHAPTER  IV 

The  Problems  of  Medium  Selection  ....         68 
Some  of  the  chief  mediums  —  Newspaper,  magazine, 
out-of-door  and  street-car  advertising  as  illustra- 
tions of  progress  in  the  bettering  of  mediums  —  An 
experience  in  correlating  national  and  local  mediums 

—  The  advertiser's  ability  as  a  factor  in  medium 
selection  —  Commercial  problems  and  advertising 
practices  —  The  case  of  "Carnation  Milk." 

CHAPTER  V 

Advertising  and  the  Consumer 89 

The  modern  consumer  —  How  advertising  shapes  con- 
sumer's wants  —  The  strong  and  the  weak  points 
in  the  consumer's  line  of  defence  —  Spending  power 

—  Saving  instincts  —  Standards  of  living  —  Price 
habits  —  Buying  customs  —  The  effects  on  the  con- 
sumer of  the  increased  number  of  appeals  —  The 
Encyclopsedia  Britannica  campaign  —  Increasing 
and  improving  the  consumer's  wants  —  The  tailor's 
defence  against  ready-made  clothing  —  One  way  to 
meet  substitution. 


CONTENTS— Continued  xi 

CHAPTER  VI 

PAGE 

The  "Regular"  Retailer 119 

The  process  of  restandardization  in  retailing  —  The 
value  of  the  small  market  as  a  short-cut  —  The 
place  of  the  "regular"  retailer  in  national  adver- 
tising plans  —  Dealer  help  —  The  case  of  Crisco  — 
Dealer  literature  —  Six  days  in  a  druggist's  mail  — 
Window  displays  —  The  Victor  Company's  use  of 
the  dealers'  windows  —  Appeals  to  the  consumer 
as  dealer  help  —  Getting  the  dealer  to  work  in  the 
selling  system  —  The  Sealshipt  oyster  plan  —  How 
the  advertiser  could  help  the  small  retailer  run  his 
business. 

CHAPTER  Vn 

Advertising  Problem  of   the   New  Types  of  Re- 
tailer       157 

The  baffling  scarcity  of  data  —  Entering  the  retail 
trade  through  the  department  store  —  Creating 
department-store  individuality  —  Advertising  as- 
pects of  the  chain  store  —  The  methods  of  the 
United  Cigar  Stores  Company  —  The  spread  of  the 
chain-store  idea  —  The  chain  store  in  the  drug 
business  —  Some  important  chain  systems  —  Mail- 
order business  —  Advertising  aspects  of  co-operative 
enterprises  —  The  United  Drug  Company  —  Co- 
operative retail  control  of  a  wholesale  house  — 
Retailers  co-operate  in  their  common  work. 

CHAPTER  VIII 

Advertising  and  the  Wholesaler       ....       206 
The   disturbed   conditions   in   the  wholesale   field  — 
The  growth  of  large  retailers  and  the  jobbers'  work 
—  The  appeals  to  the  consumer  as  they  affect  the 


xii  CONTENT^—Contimied 

PAGE 

jobber  —  Why  the  jobber  is  on  the  defensive  — 
Modern  distribution  and  the  place  of  the  middleman 

—  A  wholesale  grocer's  defence  of  his  business  — 
Why  jobbers  manufacture  —  The  private-brand 
war  —  The  pros  and  cons  of  the  private  brand  — 
How  a  roofing  concern  reclaimed  its  business  from 
jobbers'  brand  control  —  The  Steero  campaign  — 
The  jobber's  relations  with  the  manufacturer  — 
How  one  manufacturer  forced  the  jobbers  into  line 

—  The  Hunt  fruit  case  —  The  Scott  paper  case  — 
A  manufacturer's  defence  of  the  grocery  jobbers  — 
Jobbers  and  price  maintenance. 

CHAPTER  IX 

The  Manufacturer  and  His  Advertising  Problems  257 
Advertising  policy  as  a  part  of  manufacturing  plan  — 
The  factory  and  its  place  in  advertising  plans  — 
Advertising  uses  of  the  factory  —  How  the  National 
Cash  Register  sales  force  worked  over  a  small 
advertisement  —  Advertising  problems  —  A  new 
product  —  Protection  of  the  goods  in  trade  by 
means  of  advertising  —  Fashion  as  an  advertising 
problem  —  Selling  policy  and  its  advertising  effects. 

PART  II 

ADVERTISING  PROBLEMS  AND  METHODS 

CHAPTER  X 

Advertising  and  Selling  Co-ordination  .  .  .  291 
The  problems  of  production  may  be  standardized  — 
The  problems  of  selling  are  largely  individual  — 
Organization  of  the  selling  force  —  The  National 
Cash  Register  system  —  The  American  Multi- 
graph    Sales    Company's    advertising    and    selling 


CONTENTS— Continued  xiii 


PAGE 


plans  —  The  methods  of  the  National  White  Lead 
Company  —  H.  J.  Heinz  Company's  appeals  to  the 
consumer  through  the  distribution  force  —  "Sell- 
ing" advertising  plans  to  the  sales  force  —  Getting 
even  the  clerk  to  help  —  Walker  grape  juice 
methods. 

CHAPTER  XI 

Trade-mark  Problems 331 

The  uses  of  the  trade-mark  —  Trade-marks  as  com- 
mercial autographs  —  As  weapons  of  offence  or 
defence  —  Trade-mark  families  —  The  Rubberset 
group  and  others  —  Legal  aspects  of  the  trade-mark 
—  Trade-marks  refused  registration  —  Good  marks 
to  use  —  Trade-mark  selection  —  Wise  and  foolish 
advertising  names  —  Trade-mark  policy  —  Selling 
textiles  under  trade-mark  —  The  Onyx  hosiery  ex- 
perience —  Trade-mark  problems. 

CHAPTER  Xn 

Price  Maintenance 380 

What  is  a  fair  price  .^  —  How  is  a  fair  price  to  be  pre- 
served? —  Price  maintenance  and  the  advertiser  — 
Prices  of  "restricted"  and  "unrestricted"  goods  — 
A  sad-iron  maker's  experience  and  views  —  Argu- 
ments for  price  maintenance  —  Some  grocers'  views 
of  price  maintenance  —  Hotel  Astor  coffee  —  Ar- 
guments against  price  maintenance  —  Duke  C. 
Bower's  opinion  —  The  arguments  of  the  Macy 
Company  —  The  Miles  vs.  Park  decision  —  The 
Dick  Mimeograph  case  —  The  Kodak  Company's 
price  policy  —  Methods  of  price  maintenance  — 
The  effects  of  price  maintenance  on  the  volume  of 
trade. 


xiv  CONTENTS— Confinwed 

CHAPTER  Xm 

PAGE 

Disposal  of  Advertising  Costs 429 

"Who  pays  for  advertising?"  —  What  is  meant  by 
"pays"?  —  What  is  meant  by  "advertising"?  — 
Payment  for  advertising  depends  on  effect  of  adver- 
tising on  distribution  costs  and  margin  of  profit  — 
Profit  margins  of  manufacturer,  wholesaler  and 
retailer  —  Selling  costs  and  the  factors  that  reduce 
it  —  When  does  advertising  expense  become  an 
investment?  —  How  much  to  spend  for  advertising  ? 
—  Bookkeeper's  disposal  of  advertising  expendi- 
tures —  Educating  dealers  to  know  who  pays  for 
advertising  —  Social  effects  of  advertising. 

CHAPTER  XIV 

The  Advertising  Manager 461 

The  work  of  the  advertising  manager — What  he  could 
learn  behind  the  counter  —  The  real  functions  of  the 
advertising  manager  —  The  services  he  cannot  dele- 
gate —  His  relation  to  the  selling  policy — Co-opera- 
tion with  the  selling  force  —  The  scope  of  the 
advertising  manager  —  What  the  advertising  mana- 
ger should  be  —  His  duties  and  training  —  How 
some  managers  got  into  the  business  —  The  need  of 
ability  to  work  with  others  —  The  demands  of  a 
modern  advertising  manager's  position. 

CHAPTER  XV 

The  Advertising  Agency 493 

The  growth  of  the  agency  —  The  problems  of  the 
agency  —  The  work  of  the  agency  —  Medium  selec- 
tion —  Trade  aid  —  Data  gathering  —  The  agency 
and  the  selling  problems  —  Relations  of  agencies  to 


CONTENTS— Con^mwerf  xv 


PAGE 


advertisers  —  The  professional  character  of  agency 
service — The  question  of  compensation — The  pres- 
ent and  future  of  the  agency  business. 

CHAPTER  XVI 

Conclusion 537 

New  uses  and  new  forms  of  advertising  — Legal  re- 
cognition of  the  dangers  of  advertising  abuses  — 
City  boosting  —  Railroad  advertising  —  The  meth- 
ods of  the  Harriman  Lines — The  Hudson-Manhat- 
tan Railway  experience  —  Legal  restraints  on 
advertising  —  The  Printers^  Ink  statute  —  State 
boards  of  advertising  proposed  —  New  demands  on 
advertising — (1)  Contact  with  selling — (2)  Accu- 
rate knowledge  —  (3)  Exacting  standards  of 
honor. 

Index 563 


ADVERTISING  AS  A  BUSINESS  FORCE 


CHAPTER  I 

SELLING   PROBLEMS  AND  THE  ADVERTISER 

ACANNER  of  baked  beans  had  been  advertising  for 
years  that  his  beans  were  the  best  canned  beans  that 
could  be  produced.  In  spite  of  careful  devising  and 
skilful  execution  of  his  advertising  plans  his  sales  increased  only 
moderately. 

One  day  he  —  or  his  advertising  agent  for  him  —  made  an 

analysis  of  his  market.      His  methods    of  analysis  and   his 

figures  are  his  own  secret,  but  he  found  something 

Analysis    ^^^e  this:    About  60  per  cent,  of  the  families  in  "his 

of  the      market"  did  not  use  baked  beans  at  all,  as  a  regular 

Showed     P^^^  of  their  diet.     About  20  per  cent,  preferred  to 

bake  their  own  beans,  and  about  10  per  cent,  were 

using  his  beans,  leaving  10  per  cent,  of  the  possible  trade  in  the 

hands  of  his  competitors.     Then  he  saw  a  great  light.     He  had 

been  advertising  merely  to  keep  the  10  per  cent,  of  the  possible 

bean  trade  of  his  region  which  he  already  had,  and  to  win  from 

his  competitors  a  share  of  another  10  per  cent.,  but  he  was 

making  no  efifective  appeal  to  80  per  cent,  of  the  possible  trade. 

He  had    analyzed    his    product,    but    he    had    not    made    a 

study  of  his  possible  market. 

The  advertising  plan  was  rearranged  to  appeal  to  the  two 
great  unreached  classes  —  those  who  did  not  use  baked  beans 
Another     ^^^  those  who  baked  their   own  —  and  before  long 
Analysis    the  results   were   surprisingly   good.     And  then  the 
Needed     §^^^^  slackened.     A  leak  had  developed  somewhere 
and  only  a  small  part  of  the  expected  effects  of  the 
advertising  came  back  in  the  shape  of  business.     Another  inves- 
tigation showed  that  the  advertising  appeal  was  not  adequately 

3 


4  ADVERTISING  AS  A  BUSINESS  FORCE 

co-ordinated  with  the  distribution  system.  These  beans  were 
not  always  "present"  when  consumer-interest  became  con- 
sumer-demand —  when  Mrs.  Consumer  asked  her  grocer  for 
a  can  of  Mr.  Advertiser's  beans. 

This  was  a  more  difficult  problem  to  solve  than  the  other,  and 
the  manufacturer  is  not  at  all  sure  that  he  has  it  solved  even  yet. 
At  least  he  is  skeptical  about  the  permanence  of  his  solution. 
But  he  is  sure  that  his  advertising  is  giving  him  results  far 
better  than  those  he  secured  when  he  based  his  plans  on  one 
or  two  instead  of  all  three  of  the  elements  of  the  situation  — 
the  goods,  the  market,  and  the  system  of  distribution.  He 
now  sees  advertising  in  its  various  aspects  as  a  business 
force.* 

Advertising  as  a  business  force  is  the  theme  of  this  study. 

It  is   our    plan  to    investigate    this    side    of   the  subject   by 

The  Plan    examining  concrete  cases  chosen  from  such  records 

0/  This     as   are  available.     Advertising    technique    we    shall 

°°        study  only  incidentally,  leaving  a  detailed  discussion 

to  others. 

Furthermore,  we  shall  seek  to  simplify  our  study  by  confining 
our  attention  to  the  advertising  problems  connected  with  the 
sale  of  those  articles  which  find  their  final  outlet  into  consump- 
tion in  small  units  —  goods  finally  sold  at  retail. 

We  shall  try  to  find  what  is  true  in  this  field  first,  rather  than 
to  generahze  over  all  the  possible  fields  of  advertising  activity. 
If  we  can  find  how  advertising  is  tied  up  with  the  various  steps 
in  distributing  hardware,  groceries,  drygoods,  drugs,  and  the 
like,  we  may  establish  principles  which  can  be  traced  as  working 
in  community  publicity,  railway  advertising,  and  the  other 
fields  where  the  desired  ends  are  attained  by  more  indirect 
methods. 

A  good  chess  player  never  forgets  that  he  is  in  the  game 
for    one    thing.      He    wants    to    checkmate    his    opponent's 


*  This  case  has  been  based  in  part  on  actual  facts.     It  should  not,  however, 
be  taken  as  more  than  a  hypothetical  case  to  emphasize  the  two  points  made. 


SELLING  PROBLEMS  5 

king.  He  may  be  able  to  do  it  in  two  moves,  or  he  may 
take  a  hundred  moves  to  do  it.  But  that  one  thing  is  what 
he  is  after.  And  so  the  good  advertiser  never  loses  sight 
of  the  fact  that  he  is  aiming  finally  at  sales.  He  may  be 
moving  the  pawn  of  general  publicity,  he  may  be  protecting 
a  castle  of  fixed  price,  he  may  be  making  any  one  of  a 
thousand  advertising  moves,  but  ultimately  he  expects  his 
advertising  by  its  effects  on  sales  to  make  his  business 
bigger,  or  steadier,  or  more  permanent,  or  more  profitable,  or 
all  of  these  together. 

In  the  field  to  which  we  are  confining  our  attention  — 
merchandise  for  individual  consumption  —  this  ultimate  purpose 
takes  the  form  of  a  large  number  of  small  sales  to  individual 
consumers.  And  the  number  must  not  only  be  large  but  it 
must  have  all  the  possible  elements  of  permanence  and 
stability. 

The  channels  through  which  these  sales  are  to  be  executed 
become  an  element  in  every  advertising  plan  in  this  field.  The 
advertiser,  whether  he  be  a  producer,  a  wholesaler  or  a  retailer, 
is  obliged  to  lay  out  his  attack  on  the  consumer's  buying  desires 
with  an  eye  to  the  means  by  which  those  desires  are  to  be  con- 
verted into  sales. 

The  article  to  be  sold,  the  possible  consumer,  and  the  means 

by  which  the   article   is  brought  to  the   consumer  are   the 

three  great  factors  in  distribution  of  goods  for  retail 

The       consumption  which  bear  on  advertising.     An  analysis 

Consumer,  ^^  these  factors  by  some  clear,  logical  method  thus 

and  the    becomes  not  merely  a  valuable  adjunct  of  the  adver- 

System     tising  plan,  but  a  necessary  part  of  it.     We   have 

seen  how  it  changed  the  advertising  methods  of  the 

bean-canner.      The  question  is:     How   is  such   an   analysis 

to  be  made? 

No  plan  ever  has  been  devised,  and  it  is  a  safe  prediction  that 
none  ever  will  be,  which  can  be  used  as  a  foot  rule  for  measuring 
all  the  elements  of  an  advertising  campaign.     But  a  number  of 


6  ADVERTISING  AS  A  BUSINESS  FORCE 

methods  have  been  worked  out  which  contain  valuable  sug- 
gestions for  analytical  studies  of  this  kind. 

A    METHOD    OF    COMMERCIAL    ANALYSIS 

For    instance,  R.    E.    Fowler,  advertising  manager  of  the 

Printz-Biederman  Co.,  of  Cleveland,  Ohio,  is  sponsor  for  an 

ingenious  and  suggestive  series  of  charts  showing  how 

Method     an  analysis  might  be  undertaken  of  goods  {Printers' 

„  0/  Ink,  February  18,  1912,  p.  53),  of  the  possible  market 
Ptoccuaitb 

(Printers'  Ink,  February  22,  1912,  p.  20)  and  of  the 

means  of  distribution  {Printers'  Ink,  March  14,  1912,  p.  28). 
These  charts,  while  they  cannot  of  course  be  taken  as  a  final 
and  accurate  working  plan  for  every,  or  any,  advertising  cam- 
paign, do  suggest  the  kind  of  points  every  advertiser  needs  to 
have  in  mind.  And  they  are  valuable  as  a  suggestion  of  the 
point  of  view  an  advertiser  should  cultivate  whether  he  be 
interested  in  national,  sectional,  or  local  advertising  effort. 

Mr.  Fowler's  chart  is  prepared  from  the  standpoint  of  a 
manufacturer's  advertising  manager.  And  this  viewpoint  be- 
comes apparent  in  many  features  of  the  schedule  as  he  has 
laid  it  out.  This  point  should  be  kept  in  mind  when  studying 
the  outline. 

Furthermore,  it  should  be  remembered  that  this  is  merely 
a  suggestion  of  analytical  method.  It  is  doubtful  whether 
Mr.  Fowler  even  designed  it  to  be  used  as  a  scale,  or  yard- 
stick, by  which  every  advertising  plan  could  be  judged,  or 
tested.  If  it  will  help  students  of  advertising  to  approach 
their  problems  with  a  clearer  idea  of  the  complexity  of  the 
problems  they  must  solve  it  will  have  served  its  purpose 
well. 

This  chart  and  those  which  follow  should  not  be  merely 
read  over  or  glanced  through.  If  they  are  to  be  of  real  service 
they  must  be  studied.  And  the  study  must  be  critical,  and  it 
must  be  careful  and  painstaking. 


SELLING  PROBLEMS  7 

Mr.  Fowler's  chart  for  analysis  of  the  commodity  for  sale 
is  as  follows: 

TABULAR    ANALYSIS    of    PRODUCT* 


Product 


j  By  education 
( By  necessity 


Demand 


Serviceability 


Quality 


Price  to 


Profit  to 


Competition 


it    compare    with 
articles    on    these 


i  Developed 
Undeveloped 
Forced  or 
Natural 
Permanent  or 
Seasonable 
Is  it  a  necessity? 
Is  it  a  luxury? 
Is  it  a  convenience? 
Is  it  durable? 
Is  it  economical  in  use? 
foi  raw  materials 
\  of  design  THow    does 

J  of  workmanship  <  competing 
J  of  appearance      (^items? 
/of  finish 

{Jobber        'jHigh 
Broker         {■^r    ■,-        j  How  does  it  compare  with 
Retailer       (  [competing  articles? 

Consumer  J  Low 

rf  JJ^'^^t^"'^'"     (Larger  than  on  competiiig  lines 
)  ^  ,^'^  \  Same  as  on  competing  lines 

ro  -er  /Smaller  than  on  competing  lines 

Officered  by  old  men 
Oflficered  by  young  men 
Aggressive 
Lax 

Long  established 
Newly  established 
Wealthy 
Limited  means 
Their  sales  plans 
Their  adv.  campaign 
Their  policy  toward  customers 
Their  sales  manager 
Their  sales  force 

Their  credit  department's  attitude 
toward  customers 


An  examination  of  these  items  will  show  that  each  one  has 
some  bearing  on  the  selection  of  the  form  and  method  of  appeal 
to  the  consumer. 

*Printers'  Itik,  February  8,  1912,  p.  54. 


8 


ADVERTISING  AS  A  BUSINESS  FORCE 


Mr.  Fowler's  tabular  plan  of  analyzing  the  possible  market 
for  the  commodity  suggests  a  second  set  of  factors  bearing  on 
the  advertising: 


Location 


TABULAR  ANALYSIS  OF  THE  POSSIBLE  FIELD  OF  DEMAND' 

iCity  f  Wealthy 

Town  Well-to-do 

Country  Poor 

Local  Married 

Territorial         Single 
National  Young 

Middle-aged 
Old 

f  Male ■/  Laborers. . . 

Farmers 
Mechanics 
Clerks 
Professions 
I  Business  Men 


Field 


Consumers 


^Skilled 
lunskilled 


Climate 


'•  Female.  . . . 

f  Frigid 
Temperate 
Tropic 
Length  of 
Seasons. 
Temperat're 
Rainfall 
Vegetation 


[Rich 

Medium 
-iPoor 

Married 

Single 

Young 

Old 

Middle-aged 

Servants 

Factory  Workers 

OfBce  Workers 

Trade  Workers 

Prof.  Workers 

Mothers 

Society  or 
Club  Women 


T)octors 
Lawj'ers 
Ministers 
Dentists 
Mech.    Engr. 
Elec.  Engr. 
Civil  Engr. 
Etc. 


Financial 
condition 
depends  on 


Transpor'tion 


Crops 

Mining 

Manufacturing 

Transportation  Lines 

Speculation 

Prof.  Services  Rendered 

Railroads 
Water  Routes 
Trolley 
Wagons 
Pack  Trains 


*Printers'  Ink,  February  22,  1912,  p.  22. 


SELLING  PROBLEMS  9 

TABULAR  ANALYSIS  OF  THE  POSSIBLE  FIELD  OF  DEMAND — Cout* 

(  [Length  of  Haul 

Transpor'tion  \  Rates 

[Method  of  Packing 

Officered  by  Old  Men 
Officered  by  Yoimg  Men 
Aggressive 
Lax 

Long  Established. 
Field  -/  Newly  Established 

Wealthy 
Competition     J  Limited  Means 

Their  Sales  Plans 

Their  Sales  Mgr. 

Their  Sales  Force 

Their  Policy  Toward  Customers 

Their  Credit  Department's 

Attitude  Toward  Customers 
Their  Adv.  Campaign 

The  various  factors  in  the  distribution  system  and  the 
available  advertising  mediums  for  reaching  them  are  covered  by 
Mr.  Fowler  in  a  third  chart,  and  this,  hke  the  others,  is  full  of 
suggestions : 

ANALYSIS  SHOWING  SCHEME  OF  DISTRIBUTIONf 


National  Publication 

on  Adv. 

Catalogues 

National  ■ 

Mailing  Lists 
Follow-up  Letters 

Direct 

Local  Solicitors 

to 

Mail-order  Clubs 

Con- 

' Special  Offers 

sumer    - 

r  Newspaper  Adv. 

by 

Bill  Boards 

Mail 

Street  Cars 

Order 

Catalogues 

Local 

Mailing  Lists 
Follow-up  Letters 
Special  Offers 
Local  Solicitors 
Mail-order  Clubs 

"Printers'  Ink,  February  22,  1912,  p.  22. 
^Printers'  Ink  March  14,  191 2, pp.  30  and  32. 


10 


ADVERTISING  AS  A  BUSINESS  FORCE 


ANALYSIS  SHOWING  SCHEME  OF  DISTRIBUTION — Continued* 


[Direct 

to 
Con- 
sumer 

by 

Mail 
Order 


Ter'torial 


From 
Factory 

to 
Retailer  , 
to  Con 


National 


Local    ■{ 


Sectional  Magazine 

Adv. 
Newspaper  Adv. 
Bill  Boards 
Street  Cars 
Catalogues 
Follow-up  Letters 
Mailing  Lists 
Special  Offers 
Local  Solicitors 
Mail-order  Clubs 


Branch  Offices 
National  Adv. 
Auxiliary  Adv. 
Salesmen 
Education  of 


To 
Dealer 


To 
Consu'er 


Trade  Papers 

Catalogues 

Follow-up  Letters 

Mailing  Lists 

Posters 

Street  Car  Cards 

Window  Cards 

Win'w  Suggest'ns 

Cuts 

Copy 

Pers'l  Assistance 

Education  of  Sales 

Force 
Inquiries  Referred 


Catalogues 
Follow-up  Letters 
Personal  Letters 
Samples 
Canvassers 


Dealer 


Consumer 


Salesmen 

Education  of 
Orders  from  Canvassers 
Newspaper  Adv. 
Publishing  List  of  Dealers 
Bill  Board  Campaign 
Street  Car  Adv. 
Window  Displays 

Education  of  Sales  Force    f  Catalog's  ^ 

Demonstration  if  possible  J  Foll'w-ups 

Adv.  sent  Consumers         |  Samples  if 

on  Dealers'  Mailing  List  [  possible   ^ 

Newspaper  Adv. 

Bill  Board  Campaign 

Street  Car  Adv. 

Window  Displays 

Demonstrations  if  possible 

Canvassers 

Catalogues 

Follow-ups 

Samples  if  possible 


*  Printers'  Ink,  March  14,  191ii,  pp.  30  and  32. 


SELLING  PROBLEMS 


11 


ANALYSIS   SHOWING    SCHEME   OF    DISTRIBUTION ~Co7ltinued* 


From  Factory 

to  Retailer 
to  Consumer 


Terri- 
torial 


^^ 


Through  Regular 

Channels 
Jobber  to  Retailer 
to 

Consumer 


Na- 
tional 


Local 


*Printers'  Ink.  March  14.  1912,  pp.  30  and  32. 


{Sectional  Magazines 
Balance  same  as  dealer 
classification  above 

{Sectional  Magazines 
Balance  same  as 
consumer  classification  above 

National   Jobbers   Magazines 
Trade  Papers 
National  Magazine  Adv. 
Manufacturers'   Salesmen 
Jobber      -I  Personal  Letters 

Follow-up  Propositions 
Edu.  of  Jobbers'  Salesmen 
Orders  taken  by  Mfrs. 
[Salesmen  given  to  Jobbers 

National    Mag.   Adv. 
Trade  Papers 
Salesmen 
Catalogues 

Follow-up  Letters  and  Folders 
Dealer       \  ^''^  Board  Campaign 
Street  Car  Adv. 
Window  Displays 
Cuts 

Education    of   Salespeople 
Referring  of  Inquirers 
Personal  Assistance 

f  National   Mag.   Adv. 
Bill  Board  Campaign 
Street   Car   Adv. 
Dealers'  Window  Displays 
Cons'm'r^  Dealers'  Newspaper  Adv. 
Catalogues 
Follow-up  Letters 
Demonstrations   if   possible 
Canvassers 
Samples  if  possible 


fNewspaper    Adv. 
Salesmen 
Personal  Calls 
Personal  Letters 
Orders  taken  by  Mfrs.  Sales- 
men given  to  Jobbers 
Follow-up    Propositions 
Edu.  of  Jobbers'  Salesmen 


Jobber 


12 


ADVERTISING  AS  A  BUSINESS  FORCE 


ANALYSIS   SHOWING   SCHEME  OF   DISTRIBUTION — Cont* 


Newspaper    Adv. 
Local   Bill   Board    Campaign 
Local   Street   Car    Cam- 
paign 
Window  Displays 
Canvasser's  Orders  from  Con- 


Through  Regular 

Channels 

Jobber  to  Retailer 

to 

Consumer 


Local 


Dealer 


Ter't'al 


sumers 
Catalogues 
Follow-up  Letters 
Publishing  List  of  Dealers 
Education  of  Sales  Force 
Adv.  sent  to  Consumers 

on   Dealers    Mailing   List 
Demonstrations     if      possible 

(-Newspaper  Adv. 
Bill  Board  Campaign 
Street   Car  Campaign 
Dealer's  Window  Displays 
Demonstrations 
Canvassers 
Catalogues 
Follow-ups 
Samples  if  possible 


Jobber         f 

Dealer        <  Same  as  local  above 

Consumer  (^ 


Cons  m'r  < 


ANOTHER    ANALYTICAL    PLAN 


Another  method  of  approach  to  the  subject  is  that  worked  out 
by  Gerald  B.  Wadsworth  of  New  York.  This  method  is  de- 
tailed by  Mr.  Wadsworth  in  a  series  of  articles  appearing  under 
the  title  "Principles  and  Practice  of  Advertising"  in  Advertising 
and  Selling  during  1911-12.  (Copyrighted,  1912,  by  Gerald  B. 
Wadsworth.)  In  the  July,  1912,  issue  of  that  paper,  Mr. 
Wadsworth  summed  up  some  of  his  main  points  in  a  set  of 
diagrams  which  it  will  be  found  interesting  and  suggestive  to 
compare  with  the  charts  of  Mr.  Fowler. 


"Printers'  Ink,  March  14,  1912,  pp.  30  and  32. 


SELLING  PROBLEMS 


13 


ANALYTICAL  CHART— PRINCIPLES  AND  PRACTICE  OF 
ADVERTISING 

Copyrighted  iqi2  —  By  Gerald  B   Wadsworth 
The  advertising  man  has  to  deal  with  and  consider  four  important,  general 
factors  —  Commodities,  Conditions,  Methods  and  Results. 

FIRST  SECTION 


COSIHODITIES 


SECOND  SECTION 
CONDITIONS 

ASludyofclrcuio- 
itsncps  thai  influ- 


COhSIDERATIONS  CONSIDER-XTIONS 

The  advertising  man  Npxl  be  should  obtai.> 

inusl   first   acquire  a  a   knowledge  of    the 

general  knowledge  of  Specific  com[nodit>  in 

COHUDoditiea  question 


THIRD  SECTION 


CONSIDERATIONS 


Then  he  will  be  m  a 

He  should  next  Qndoiit 

A/tet  Ibis  he  should 

position  to  judge  as 

aboulTrade  conditions 

study  the  user  as  t 

Co  Its  relative  value 

generally,  then  ascer- 

aod   conaequeDt    ad 

lam   how    they    affect 

vertisabilily 

the  sale  of   the  com- 

brought  tobearon  tile 

modily  ia  queslioo. 

individual    members 
ofihalclasstochaoK* 
or  stimulate  the  com- 
munity o(  wants 

FOURTH  SECTION 


A  Study  of  Sales  Pui- 


CONSTRL'CTION 


APPLICATION 


After  this  he  is  in  a 
pot>tioD  to  define  the 
form  of  appeal  and  to 
eonslnjct    his    copy 
accordingly     The  in- 
gredieoU  should   be 

L'nless  the  ad 
IS  brought  to  iJ 
tion  of  the  us 
most  effective 
possible     the 
ment  v.ill  not 

M-ientiScally       com- 

Stable 

After  the  campa^n 
has  l>e«n  planned  an 
estimate  should  be 
made  of  the  minimum 


ACHIEVED 

When  thecampaignhi 
been  completed,  con 
pare  what  has  been  aC' 
complished   with 
expectations,  and 
alyzethediseiepai 


the 


FIRST    SECTION 

The  advertising  man  should  ascertain  the  status  of  a  commodity,  "both  as 
to  its  intrinsic  merit  and  the  relation  it  bears  to  commodities  in  general.  This 
enables  him  to  judge  as  to  the  possibilities  of  its  development.  This  may  be 
accompHshed  by  determining  to  what  degree  it  meets  or  fails  to  meet  certain 
requirements.  To  assist  this  effort  the  study  of  commodities  is  regarded  from 
three  viewpoints:  i.  e. —  Commercial  Considerations,  Material  Considerations, 
Monetary  Considerations. 

co^fl^fOD^^ES 


COMMEKCUL 
CONSIDERATIONS 

ABvansABiLin 

EFFICIENCY 

Scope  of  Utdity 

Meritonous 

Mediocre 

Impractical 

SOURCE 

timitcd 
Ualimitcd 

CONDITION 

Novelties 

Liwunes 

Necessities 

Staples 

PROPERTIES 

On^FERENTIATION 

Specific 
General 

llniqueness 
Excliisivenes3 

APPEARANCE 

UTILITY 

Attractiveness 
Distinctiveness 
Singularity 

Appropnatenesj 
Ad^iDUbJity 

MONETARY 
CONSIDERATIONS 


VALUE 

1 

1                                          1 

ESSENTIAL 

UTILITY 

SalabiJity 
Earning  Power 
Convertibteneu 


TRUSTWORTHINESS 


Taogiblf 

lotangibie 


Constiiuei 
Collective 
iBtCfral 


Excessive 
Normal 
load  equate 


14  ADVERTISING  AS  A  BUSINESS  FORCE 

CONDITIONS 


TRADE  CONDITIONS 

^  r~ 

1 

COMPETITION 

niSTRIBlTION 

- 

SALES     POLICY 

1 

1 

EFFECT 

""       BASIS 

CLASSES 

Actual 

Substitute 

Progressive 

PROCESS 

Direct 
Indirect 

POLICY 

Cooperative 
Antagonized. 

fH(>ry>^ 

BASIS 

Construe  live 
Destructive 

Price 

Quality 

Utility 

Planned 
Haphazard 

^ertiianent 
Changeable 

EFFECT 

Active 
Passivi 

PER>LO.ENCE 

Reliable 
Unreliable 

RELATION'' 

Dependent 
Independent 

OBJECT 

OeSnil* 
Indefitlitj 

OUTLET 

1 

PROCESS 

Direct 
Indirect 



Producer* 

Wholesalers 

Rctailera 

limited 
Unlimited: 

DEGREE 

Extensive 
Intensive 

JIETAILING 

Proteclea; 
Unprotected. 

ACTION 

Progressive^ 
Passive 

SCOPE 

'Resi'rIctTv* 

t'Drejt/ictiv* 

PRODUCTION 

OPER-^TION 

Tiestricted 
Unrestricted 

CONDITiaV 

Natural 
Stimulated 

QUALITY 

■Original'  * 
Imitative 

EXPRESSION 

1 

AsiertatiVe 

FACTORS 

NATURE 

Related   . 
UuRUUd 

•EXTENT 

Deroonstrativ'« 

Absolute 
^pendent 

Efficient 

iaction; 

I'rcmiture 
Belated 

POLICY 

Liberal 

iExtortionate> 

•JJATURE. 

Controlled 
lUacontroQed 

OPERATION 

Stimulative, 
Subjective 

SF.IX 

JJETffOD 

Educational 
AutoiDatio 

1 
\n        ORGANIZATION 

1 

1 

PKOC 
Co6rd 
Subur 

ESS 
ijinative 

ACT 
Cooper 
Indepe 

ON. 
stive' 
idcot 

METHOI 
Syitemati 
Vmyiitnu 

>s 

tic 

UTILIT 
Ifficien 
4nefficit 

y 

nt 

salabi 

Constru 
Miscqas 

LITY 

d 

rtud 

SELLING  PROBLEMS 

CONDITIONS 


CONSl'MF.R    CONDITIONS 


15 


DEMAND 

I 

1 

NATURE 

Special 
General 

1 KFFEC r 

Immediate 
Cumulative 

.PROCESS 

'stimulated 
f  Discouraged' 

1 EXTENT 

Limited 

Unlimited 

SPECIFIC! 

Incidental 

Fixed, 

ACTION 

Periodic 
Continuous 

CONDITION 

Natural 
Creative. 

SCOPE 

local 
National 

PHYSIOLOGICAL 


'ECONOMIC 

1 

1 

WANTS 

Environment 
State  of  Mind 

.A\TALTH 

Capital 
Income 

ENVIRONMENT 

Climatic 

Geological 

Socialogical 

VBUYING.CAPACITY 

Industrial 
Mooetary 

SOCIALOGICAL 

Density 
Migration 


PSYCHOLOGICAL 


1 

1 

1 

ACTS 

Conscious 
Unconscious 

iUBlT 

Incidental 
Dominant 
Universal 

■CREATION 

Composite 
Distinct 

NATURE- 

Character 
Stimulus 

.NATURE 

Constructive 
Destructive 

KINDS 

Revelant 
Irrcvelant 

MENT.U.  PJiOCESS. 

Impulsive 
Deliberative. 

STIMULUS 

Substantial 
H>yotlieticaI 

CLASSES 

■  Attention 
Interest 
Desire 
Action 

BIPRESSlO^i 

Simplicity 
Conclusiveness 

PROCESS; 

Imaginative 
Suggestive 

QU.U,ITY 

Positive 
^Negative 

EXPRESSION 

Basis 

Contingeneiej 

iPRQPEjpiEa' 
Velocity' 


I  NERVOUS  ACTIVITIES 


Sensory 
Motor 


JUNDS 

I  Reflex 

Simple 
Complex 
Reciprocal 


PROCESS 
Receptors 
Kffectord 


16  ADVERTISING  AS  A  BUSINESS  FORCE 

A    FORM-AND-MOTIVE    CHART 

A  third  type  of  analytical  method  is  one  which  attempts  to 
attach  to  the  analysis  a  record  of  the  forms  of  appeal  which  are 
called  for,  thus  Imking  the  motive  to  be  stirred  vnth.  the  form  of 
appeal  which  is  to  stir  it.  Under  the  title  "WTiat  Makes  Men 
Buy?"  this  form  of  chart  is  described  by  Carroll  D.  Murphy  of 
the  System  staff  as  follows: 


ANALYSIS  OF  SELLING 
OR  ADVERTISING   PROBLEM 

c 

1 

t 

"a 

< 

Buying  Actioa 

Required  of 

Prospect 

Increased  Expenditure  of 
Prospect's    Money 

Change  in  Direction  of 
Present  Expenditure 

Class  of  Product 

A 

B 

c 

D 

Character  of 
•Product 

Unfamiliar  and 

Without  Ueady 

Demand 

Unfamiliar  but 
Matching  Unex- 
pressed Demand 

Familiar  but 
Offered  in  an 
Unusual  way 

Similar  to  Goods 

Regularly  Sold  in 

Same  Way 

Attitude  of 
Prospect 

Thinks  He  is 

Doing  Well 

Enough  Without  it 

Will  Kcalizc  Need 

When  Informed 

of  Product 

Habitually  Buys 

Some  Brand 
in  Another  Way 

Now  Does 
Like  Buying 

Task  of 
Sales  Campaign 

Must  Make  Him 

Feel  His 

Disadvantage 

Must  Teach  Him 
What  Product  is 

Must  Lead  Him 
to  Change 
This  Habit 

Must  Emphasize 
Brand  to  Gel 

Dominant  Tone 
of  Sales  Campaign 

Persuasive  and 
Impelling 

Analytical  and 
Descriptive 

"Reason  Why" 

Suggestive 
or  Publicity 

s 

i: 
< 

a 

1 

< 
1 

_c 

3 

03 

Money 

X 

X 

X 

Utility 

X 

X 

Caution 

X 

X 

I'ridc. 

X 

Self-indulgence 

X 

X 

*Instead  of  interviewing  retailers  on  why  products  are  not 
moving  and  in  this  roundabout  way  getting  at  its  selling  prob- 
lems, one  concern  has  for  years  kept  an  analytical  sales  record 

*System,  September,  1912,  p.  227. 


SELLING  PROBLEMS  17 

of  its  various  products,  the  kinds  of  argument  and  copy  which 
have  proved  effective  or  otherwise,  and  the  different  api)eals 
which  have  successfully  marketed  each  article.  The  chart  is 
based  on  these  records.  Every  time  the  firm  has  attacked  a 
new  sales  problem  or  planned  a  new  advertising  campaign,  its 
selling  appeal  has  followed  the  lines  of  this  chart. 

The  first  question  asked  when  the  marketing  of  a  product 

is  laid   out  with  the  aid  of    this    form-and-motive    chart  is: 

The  First  "Must  this  selling  effort  induce  an  outright  expenditure 

Ste-p  in   on  the  prospect's  part,  or  merely  change  the  direction 

Classifi-  of  expenditure  to  which  he  is  accustomed?        Must  he 

cation  decide  to  spend  for  it,  or  merely  to  choose  it  in  place 
of  something  else?" 

Tests  have  demonstrated  that  this  question  is  of  prime  impor- 
tance. To  induce  new,  outright  expenditure  is  a  heavy  burden 
on  the  entire  sales  machine.  Contrary  to  the  opinion  of  many 
it  is  easier  for  the  later  entrant  into  any  selling  field  to  arouse 
demand  than  for  the  pioneer. 

In  the  analysis  of  products  four  classes  are  found  to  be  im- 
portant. If  the  new  product  you  offer  meets  an  existing  and 
evident  want  or  need,  your  prospect  falls  into  the  "B"  column 
on  the  chart.  "I've  wanted  something  like  that,"  he  tells 
himself;  and  having  long  planned  to  make  such  a  purchase 
when  opportunity  offered,  he  puts  through  the  expenditure  on 
his  previous  "O.  K. "  You  need  only  to  explain,  describe  and 
picture  your  product,  showing  that  it  is  what  he  has  needed 
and  desired. 

If,  however,  the  article  is  something  whose  lack  he  has  never 
felt  and  which  on  its  face  appears  to  be  merely  an  extra  expense, 
your  prospect  is  in  column  "A."  He  thinks  that  he  is  doing- 
well  enough  without  your  interference  in  his  routine  program 
of  purchase  and  use. 

In  this  case  your  sales  campaign,  selling  talk,  demonstration 
and  advertising  must  not  only  develop  the  possibility  of  more 
profit  through  your  article,  but  must  make  the  prospect  feel 
keenly  the  disadvantage  and  loss  of  being  without  it.  It  must 
inspire  him  with  a  desire  to  save  effort,  make  money  or  seize 
some  new  delight,  and  persuade  him  to  make  an  unexpected 
outlay  for  the  untried  advantage  it  may  be  to  him.  "B" 
stands  waiting  for  you  to  come  and  offer  him  what  you  have. 
"A"  is  headed  in  the  wrong  direction;  you  must  stop  him,  turn 
him  and  take  him  back  with  you. 


18         ADVERTISING  AS  A  BUSINESS  FORCE 

Among  such  commodities  as  are  in  habitual  use  there  is  a 

further  distinction.      All  of  us  must  have  food  and  clothing. 

All  in  one  group  or  another  must  have  paper  and 

TheSub-  pencils,  or  nails  and  cement.       If   you   have   goods 

^"7*4""*  to  sell  similar  to  those  I  am  buying,  you  will  try  to 

Second    m^ke  them  as  cheap,  as  good  and  as  easy  to  buy  as 

Group     those  I  now  use.     If,  then,  by  persistent  advertising 

or  other  selling  effort  you  stamp  your  brand  on   my 

mind  more  strongly  than  your  rival,  you  attract  my  patronage. 

When  I  go  to  the  counter  I  will  probably  inquire  foryourproduct. 

If,  however,  your   brand  of  bread  must  be  ordered   from  a 

distance  and  I  am  used  to  buying  bread  at  my  home  corner,  or 

your  coal  must  be  ordered  by  mail,  while  another  firm's  salesman 

comes  to  my  door,  your  selling  tactics  or  words  must  do  more 

than  suggest  to  me  the  name  of  a  brand;  it  must  change  a  habit 

of  mine.     And  a  change  of  habit  except  along  the  line  of  least 

resistance  must  have  a  motive  back  of  it.  Your  selling  must  show 

"reasons  why."     You  find  me  w^alking  past  your  door;  you 

must  give  me  an  individual  cause  for  turning  in  at  your  place. 

This  fourfold  classification  suggests  the  essential  links  be- 
tween any  product  and  its  prospect  —  the  dominant  thought 
of  its  selling  program.  Other  plans  may  pay,  but  a  part  of 
such  sales  efforts  are  directed  at  points  on  which  your  prospect  is 
already  sold.  These  principles  have  been  used  as  a  guide  in  the 
making,  buying,  selling,  demonstrating  and  advertising  of  goods. 
Skilfully  used,  they  reduce  to  black  and  white  the  position  of 
any  business.  They  indicate  the  angle  of  approach  —  the 
style  of  appeal  which  should  predominate  and  the  conditions 
that  must  be  met.  They  guide  the  advertising  manager  as  he 
writes  and  the  sales  manager  as  he  coaches  his  men. 

An  improved   household  article  was   recently  put  on  the 

market.      The  first  selling  campaign  failed;    an  investigation 

followed  immediately.    More  than  a  hundred  av^erage 

M'^^f  prospects  gave  as  a  reason  for  their  neglect  the  fact 
Selling      ^^^^^  they  had  felt  no  disadvantage  in  their  use  of  the 

Talk  familiar  device.  It  had  always  served  and  it  still 
seemed  good  enough  for  them.  The  new  article  had 
been  designed  to  overcome  difficulty  in  cleaning;  so  far  the  ven- 
ture had  unconsciously  followed  the  chart.  But  at  the  selling 
crisis,  the  vital  advantage  of  the  new  over  the  old  device  and 
the  fact  which  made  the  old  undesirable  had  been  lost  to  view. 
An  article  in  class  "A"  had  been  offered  with  class  "B"  sales  talk. 


SELLING  PROBLEMS  19 

When  on  the  other  hand  the  latest  novel  comes  out  in  a 
second  edition  —  testimony  enough  of  its  popularity  —  simple 
descriptions  are  sufficient  to  sell  it.  It  falls  into  that  class  of 
commodities  for  which  an  eager  public  is  waiting.  So,  too, 
mere  announcement  of  the  name  sells  gum,  soft  drinks  and 
cigars.  It  takes  genuine  reasons,  however,  to  make  the  house- 
wife risk  her  expensive  woolens  and  laces  with  an  unfamihar 
soap.  It  means  a  decided  change  in  buying  habits  for  her  to 
demand  a  new  brand  of  rice,  cornstarch  or  cocoa,  against  which 
her  grocer  very  probably  will  make  a  protest.  There  must  be 
reasons  behind  the  choice,  and  those  reasons  must  be  made 
plain.     .     .     . 

At  the  bottom  of  the  form-and-motive  chart  .  .  .  these 
motives  are  roughly  classified  under  five  heads:  1.  Money 
gain  or  money  saving.  2.  Utility,  necessity,  conveni- 
Motives  ence,  enjoyment,  love,  moral  considerations.  3.  Pride 
or  emulation.  4.  Caution  and  foresight.  5.  Self- 
indulgence,  such  as  luxury,  ease,  laziness,  vanity,  appetite. 

Every  blend  of  the  human  motives  which  prompt  buying  can 
be  classified,  more  or  less  loosely,  under  these  heads.  To  de- 
termine that  the  tone  of  your  sales  talk  and  advertising  should 
be  persuasive,  descriptive,  logical  or  suggestive  is  not  enough 
if  you  want  to  secure  maximum  returns  from  your  campaign. 
Your  appeal  will  still  be  made  blindly  unless  directed  at  the 
most  inviting  specific  motives  you  can  discover  in  your  prospects. 

The  most  elementary  appeal  is  to  offer  your  prospect  money 

gain  or  money  saving  through  his  purchase.       Any  periodical 

you  pick  up  offers  examples  of  "bargain  price"  head- 

The        dings:  "Direct  from  the  works  saves  40  per  cent." 

Appeal     o^  "^^  factory  prices  on  approval."     The  cheaper 

store  plays  up  price  more  often  than  any  other  appeal. 

Sales  schemes  are  generally  based  upon  money  gain;  it  is  the 

chief  resort  of  the  advertiser  who  is  groping  his  way. 

The  money  motive  supplies  the  big  outlet  that  accommodates 
supply  to  demand.  By  a  quick  shift  of  price  and  a  limited  time 
appeal  to  the  money  motive,  stocks  of  all  sorts  and  under  every 
condition  are  closed  out  with  a  margin  of  profit  or  salvageT 
Over-emphasis  of  this  money  motive,  however,  may  result  in 
a  loss  of  prestige  and  patronage  where  prospects  want  utility  — 
quality  rather  than  cheapness. 

Wherever  there  is  a  warm  human  touch  —  wherever  the 
saleman's  talk,  the  window  display,  the  demonstration  or  the 


20  ADVERTISING  AS  A  BUSINESS  FORCE 

advertisement  strikes  home  —  the  appeal  can  be  classified  by 
the  chart  as  touching  one  or  more  of  the  vital  motives  which 
actually  underlie  your  interest  in  your  purchase. 

Such  an  appeal  may  not  insure  the  success  of  a  campaign,  for 

at  every  step  between  factory  and  consumer  there  are  chances 

of  error  in  merchandising.     During  years  of  business, 

The  Use  of  however,  this  form-and-motive  chart  has  been  proved 

^n^^W\    ^^  ^^  ^^  excellent  preliminary  test  of  sales  tactics. 

Guarantee    '^^^  average  copy-writer  throws  aside  an  advertise- 

Success     ment  which  has  failed  and  starts  anew.  The  salesman 

"tries  out"  one  style  of  talk  and,  failing,  discards  it 

for  another  line  of  argument.     But  the  man  who  has  charted 

his  problem,  revises,  develops  and  strengthens  the  form  and 

direction  of  his  appeal  until  it  sets  a  new  mark  for  sales. 

Under  each  of  the  five  headings  many  specific  motives  may  be 
grouped.  Judgment,  working  on  the  results  of  a  few  tests,  will 
determine  for  any  business  which  are  the  vital  ones 
A  Case  of  \\iqX  impel  the  average  prospect  to  buy.  The  manu- 
b  ^^Chanae  ^ ^cturer  of  a  patent  weather  strip  launched  his  product 
of  Appeal  with  enthusiastic  copy  and  sales  talk  about  the  clean- 
liness and  warmth  of  the  "weather-tight  home." 
But  people  did  not  buy.  Then  he  changed  his  approach  and 
pictured  a  house  where  dust  and  disease-laden  floor  drafts 
constantly  threatened  the  health  of  the  children.  Immediately 
sales  picked  up.  Unconsciously  he  had  reclassified  his  product 
under  the  "A"  group  and  changed  the  basis  of  his  appeal  from 
a  lower  to  a  higher  motive.  He  secured  extra  expenditure 
from  his  prospects  by  making  them  feel  the  disadvantage,  the 
danger  of  being  without  his  product.  His  former  appeal  to 
mere  comfort  and  pride  had  nothing  like  the  selling  force  of 
this  appeal  to  the  more  potent  motives  of  caution  and  par- 
ental love.     .     .     . 

ANALYSIS  OF  A  BREAD  MARKET 

How  the       With  these  charts  in  mind  as  suggestions  of  the 
Baking    general  plan  for  analytical  studies,  let  us  look  for  a 
Company  moment  at  the  methods  employed  in  an  actual  case. 
theN^ew    A  concrete  example  is  found  in  the  case  of  the  Ward 
York      Baking  Co.'s  attack  on  the  New  York  market.     W. 
B.  Ward,  of  this  company,  in  telhng  about  its  cam- 
paign, calls  attention  to  the  fact  that  the  perishable  nature  of 


SELLING  PROBLEMS  21 

the  product  figures  as  the  dominant  factor  controlling  the  dis- 
tribution system.  In  the  case  of  bread  we  have  a  commodity 
which  must  be  completely  distributed  within  a  few  hours, 
although  its  producers  enjoy  a  partially  compensating  advan- 
tage in  the  universal  character  of  the  market.     Mr.  Ward  says : 

.     .     .     .     *The  first  step  was  to  take  a  census  of  the  trade 
in  New  York  and  Brooklyn.        We  used  a  big  map  of  New 
York  and  another  one  of  Brooklyn.  These  were  marked 
Census    ^^  ^^^^  districts  and  territory  was  assigned  to  each 
salesman.    Our  sales  force  was  recruited  from  the  force 
we  already  had  trained  in  Pittsburgh,  and  naturally  our  best 
men  were  chosen.     After  having  been  assigned  to  certain  terri- 
tory, a  salesman  was  provided  with  forms  on  which  each  pros- 
pective dealer  in  his  section  was  to  be  listed. 

This  listing  was  done  after  a  personal  call  had  been  made 
upon  the  dealer  and  such  information  as  "standing  in  the  com- 
munity," "probable  bread  usage,"  etc.,  was  obtained. 
the^Dealer  There  was  every  incentive  for  the  salesman  to  be  accu- 
rate in  his  reports.  After  the  census  was  completed 
the  work  of  securing  dealer  co-operation  was  conducted  by  the 
same  men.  Pencils  and  aprons  bearing  the  name  of  our  product 
were  distributed  among  the  grocery  stores,  and  while  such  things 
were  being  passed  around,  our  men  took  particular  pains  to  get 
to  know  the  dealer  and  his  employees.  Of  course,  our  repre- 
sentatives were  equipped  with  a  strong  selling  talk,  and  to  that 
I  am  coming  presently. 

You  will  understand  that  all  this  work  with  the  dealer  was 
being  carried  on  while  our  plants  were  being  erected.  In  mak- 
ing and  selling  bread,  our  experience  has  shown  that  there  is  one 
selling  point  which  overbalances  all  others  in  importance,  and 
is  most  effective  with  both  consumer  and  dealer  alike.  That 
point  is  cleanliness.  Every  step  in  our  manufacturing,  our 
merchandising  and  our  advertising  campaign  verged  on  that 
one  point. 

Our  plants  were  advertised  by  newspaper  and  billboard  as 

J.     J        "Snowwhite  Temples  of  Cleanliness."      We  have  in- 

ing   Tadk-  Vented  and  perfected  machinery  which  cleans  the  flour, 

ing  Points  mixes  the  dough,  kneads  the  bread,  etc.     This  has  not 

speed  alone  for  its  object,  but  also  the  elimination  of 

'Printers'  Ink  March,  14,  1912,  p.  3 


22  ADVERTISING  AS  A  BUSINESS  FORCE 

the  bare  hand.  We  not  only  wrapped  the  loaves  in  tissue 
paper,  but  we  put  white  gloves  upon  the  hands  of  our  delivery 
men.  In  addition,  their  caps  and  uniforms  were  also  white, 
further  to  carry  out  the  idea  of  cleanliness. 

Even  the  way  in  which  we  have  fixed  our  trade-mark  label 
to  the  loaf  has  an  interesting  slant.  For  years  bakers  had  been 
in  the  custom  of  pasting  the  labels  on  the  bread.  One  day 
somebody  discovered  the  obvious,  and  simply  put  the  label  in 
the  bottom  of  the  pan  before  the  dough  was  poured  in.  The 
natural  stickiness  of  the  dough  and  the  process  of  baking  did 
the  rest.  Here,  again,  we  accomplished  the  two  great  desid- 
erata, time-saving  and  cleanliness. 

In  Pittsburgh  we  had  had  many  visitors  at  our  plants,  and  it 
was  the  best  kind  of  advertising.  When  they  saw  the  white- 
tiled  rooms,  the  interior  full  of  sunshine,  the  perfected  ma- 
chinery, the  absence  of  handling  with  the  bare  hands,  the  best 
sort  of  an  impression  was  created;  but  when  we  came  to  New 
York  it  did  not  seem  possible  all  at  once,  in  starting  a  big  busi- 
ness, to  get  the  residents  to  come  out  and  visit  our  plants,  which 
were  located  in  places  inaccessible  to  the  greater  portion  of  the 
population. 

So  here  is  where  advertising  and  the  printed  word  came  into 
play.  We  used  solid  pages  in  the  daily  papers,  playing  up  as 
strongly  as  we  knew  how  all  the  points  bearing  upon  the  cleanli- 
ness of  our  product,  and  the  speed  with  which  it  was  gotten  into 
the  consumer's  hands  after  it  was  made.  We  invited  the  people 
to  visit  our  plants,  and  while  it  was  not  expected  that  many 
would  respond,  they  were  at  least  impressed  with  the  fact 
that  our  conditions  were  right,  and  that  we  had  nothing  to 
conceal.  Street  cars,  electric  signs,  and  billboards  were  used 
in  connection  with  the  daily  paper  advertising. 

A  happy  condition  which  was  entirely  accidental  probably 
helped  the  campaign  along.  I  knew  quite  definitely  the 
conditions  under  which  a  city's  bread  is  usually  baked.  So 
I  was  not  particularly  shocked  when  I  read  the  report  of 
Commissioner  of  Accounts  Fosdick  that  had  just  been  sub- 
mitted to  Mayor  Gaynor.  It  said  that  of  the  4,000  or  more 
bakeries  in  Greater  New  York  scarcely  one  hundred  were 
above  ground,  and  in  buildings  erected  or  remodeled  for 
baking  purposes.     ... 

.  .  .  When  the  papers  began  to  print  reports  of  such  in- 
vestigations, it  naturally  helped  our  campaigning,  but  we  did  not 


SELLING  PROBLEMS  23 

in  any  way  inspire  the  stories  nor  employ  a  press  agent.  When 
we  were  ready  to  advertise  we  simply  came  forward  with  the 
facts  about  our  own  products,  and  told  the  truth  in  paid  si)ace. 
The  response  was  instantaneous. 

We  operate  200  automobiles  in  New  York  for  our  delivery 
system.  This  again  has  a  bearing  upon  our  two  selling  points  of 
speed  and  cleanliness.  It  is  not  particularly  appetizing  to  think 
that  a  man  who  is  handling  harness  and  driving  horses  also 
handles  your  food  supply.  Furthermore,  the  automobile  deliv- 
ery enabled  us  to  cut  down  time  on  long  hauls  materially,  and 
give  our  entire  system  the  speed  of  a  daily  newspaper  delivery. 

It  will  be  of  interest  to  know  that  both  our  manufacturing 

and  distribution  plans  were  working  smoothly  before  we  started 

any  advertising  at  all.     One  of  the  advertisements  con- 

Distribu-  tained  this  explanation  of   the  way  to  test  Ward's 

^Tdvtftis-  Tip-Top  Bread:     "1.  Eat  it.     2.  Analyze  it.     3.  Rea- 

ifig  son  it  out."  The  test  suggestions,  coupled  with  a 
short,  pointed  talk  on  our  process  of  manufacture,  was, 
to  my  mind,  the  most  striking  advertisement  we  ran.  Following 
this  series  there  was  a  big  jump  in  our  sales.  It  was  to  be  ex- 
pected, and  right  there  came  in  a  test  for  our  distribution  plan 
which  brought  out  one  of  its  strongest  features  —  namely,  flexi- 
bility. In  order  to  supply  the  trade  developed  by  the  advertising, 
our  output  went  ahead  by  leaps.  Sometimes  the  number  of 
loaves  covered  by  a  leap  was  in  excess  of  the  number  demanded 
by  dealers.  In  such  cases  we  simply  sent  salesmen  into  new 
territory  and  repeated  the  original  process.  These  men  sold 
enough  to  take  up  the  slack  and  insure  the  marketing  of  each 
day's  production  of  bread  the  day  it  was  baked.  We  have 
been  expanding  our  sales  system  steadily  since  opening  last 
September,  but  we  have  not  covered  New  York  and  Brooklyn 
yet,  with  suburban  New  Jersey  still  in  the  vista.     .     .     . 

ANOTHER    APPLICATION    OF    ANALYTICAL    METHODS 

Xfie  Harry  Tipper,   advertising  manager   of  the  Texas 

Factors    Qil  Company,  in  discussing  the  factors  in  production 
Control  the  ^^nd  distribution  which  govern   advertising  does  not 
Advertis-  push  his  analysis  into  as  great  detail  as  either  of  the 
gentlemen  previously  quoted,  but  he  begins  his  ap- 
plication of  the  same  idea  by  setting  down  a  list  of  items  under 


24  ADVERTISING  AS  A  BUSINESS  FORCE 

fifteen  heads.  Mr.  Tipper,  it  will  be  noticed,  goes  even  back 
of  the  goods,  to  the  factory  conditions  themselves.  His  list 
is  as  follows : 

*  1.  The  capacity  of  the  plant  involved. 

2.  The  consumption  of  the  article  in  question. 

3.  The  number  of  competitors  in  the  field;  and,  consequently, 

4.  The  total  amount  of  business  which  can  be  secured. 

5.  The  present  consumption  in  relation  to  the  total  possible 
consumption. 

6.  The  increase  in  the  consumption  each  year  during  a  series 
of  years  up  to  the  present. 

7.  The  consumption  in  the  different  states  or  zones  which 
may  be  of  interest  from  a  selling  standpoint,  showing  best  and 
worst  from  the  total  consumption. 

8.  This  consumption  balanced  against  the  square  mileage 
involved. 

9.  The  number  of  dealers  who  would  handle  this  article  — 
if  it  is  to  be  sold  through  dealers. 

10.  Present  distribution  of  the  material  in  question. 

11.  The  present  market  price  of  competitive  articles. 

12.  The  total  amount  of  money  involved  in  business,  con- 
sidering the  consumption. 

13.  The  total  amount  of  money  involved,  considering  the 
percentage  of  present  consumption  which  could  reasonably 
be  expected. 

14.  The  total  profit  involved  in  this  amount  of  business,  and, 
consequently, 

15.  The  total  amount  of  advertising  and  selling  expense 
which  could  be  absorbed  in  developing  the  business. 

Commenting  on  this  list  Mr.  Tipper  says : 

It  will  be  seen  from  this  array  of  the  factors  entering  into 
the  case  that  the  advertising  manager,  in  order  to  be  in  a  position 
to  decide  on  the  extent,  the  method  and  the  reason  for  adver- 
tising, must  be  familiar  with  the  conditions  from  all  selling- 
standpoints.  Otherwise,  the  plan  of  advertising  decided  upon 
may  have  only  a  comparatively  small  relation  to  the  sales  effort 
and  conditions. 

It  has  been  unusual,  even  in  the  selling  department  of  any 

Printers'  Ink,  December  28,  1911,  p.  10. 


SELLING  PROBLEMS  25 

business,  to  develop  all,  or  nearly  all,  the  factors  which  arc 
expressed  above,  and,  as  a  natural  consequence,  a  large  amount 
of  money  is  being  expended  every  day  in  experimentation  upon 
a  market  regarding  which  the  facts  are  already  developed. 

The  usual   plan  in  by  far  the  majority  of  cases  where  it 

is  decided  to  market  a  new  product  is  to  start  a  few  salesmen  on 

what  would  appear,  from  a  personal  impression  or 

Danger  of  general  knowledge  of  the  trade,  to  be  the  most  impor- 

Im7es-    ^^^^  markets  and  feel  the  thing  out  in  this  way.     An 

sions  expenditure  of  $20,000  to  $50,000  is  easily  absorbed 
in  this  experimentation  without  developing  such  in- 
formation as  would  form  the  basis  for  an  examination  into  the 
possible  efficiency  of  selling  and  the  possible  profit  to  be  secured. 
Personal  impressions,  even  those  of  one  or  two  men  who  have 
been  brought  up  in  the  industry,  are  easily  misled,  by  appear- 
ances and  local  conditions  through  restricted  fields,  into  an 
entirely  wrong  conception  of  the  market  and  the  methods  to  be 
adopted  in  covering  such  market  most  efficiently.  In  working 
out  a  case  a  few  years  ago,  the  writer  was  particularly  struck 
with  this  condition. 

The  plant  in  question  had  a  capacity  which  was  considered 
by  the  experienced  sales  manager  to  be  quite  small.  It  was  also 
.    concluded  by  this  gentleman  that  $15,000  or  $20,000 
ase  m  ^q^\^  |^g   spent   for  advertising  this  particular  out- 
put in  addition  to  the  organization  of  a  considerable 
sales  force. 

Knowing  very  little  of  the  trade  conditions  in  this  field  and 
being  impressed  with  the  lack  of  statistics  on  the  subject,  the 
writer  made  an  investigation,  which  was  carefully  carried  out, 
into  the  possible  market  along  the  lines  in  which  it  was  pro- 
posed to  sell  the  article  in  question. 

This  investigation  showed:  (a)  that  the  personal  impression 
or  judgment  of  the  sales  department  was  utterly  at  fault  and 
that  the  writer's  judgment  was  equally  out  of  line  with  the 
facts;  (b)  that  the  total  consumption  of  the  article  in  question 
in  the  field  proposed  did  not  absorb  more  than  one  fourth  or 
one  fifth  of  the  capacity  of  the  plant,  and  anywhere  from  one 
eighth  to  one  tenth  of  the  amount  expected;  (c)  that  the  cost 
of  the  advertising  and  sales  organization  proposed  would  have 
been  entirely  out  of  line  from  the  standpoint  of  possible  con- 
sumption within  the  near  future. 

While  this  was  an  unusual  case,  on  account  of  circumstances 


26  ADVERTISING  AS  A  BUSINESS  FORCE 

in  the  industry  involved,  which  made  the  apparent  importance 
of  the  business  much  greater  than  there  was  any  warrant  for, 
it  showed  conckisively  the  necessity  for  investigation  of  the 
trade  conditions  in  order  to  form  a  reasonable  basis  for  the 
formation  of  a  selling  plan;  and  inasmuch  as  advertising  is  a 
part  of  the  selling  plan,  the  same  necessity  arose  in  the  determi- 
nation of  the  extent,  method  and  conditions  of  the  advertising. 

Apart  from  such  an  unusual  condition  as  this,  the  excessive 
cost  of  selling,  due  to  promotion  and  sales  work,  covering  fields 
and  methods  which  the  consumption  of  the  articles  would  not 
warrant,  has  just  as  much  to  do  with  the  difficulties  in  many 
organizations  as  the  over-capitalization  of  physical  properties. 

I  have  in  mind  a  plant  in  the  Middle  West  where,  although 
the  business  had  increased  to  the  extent  of  requiring  double 
the  capacity  to  fill  it,  the  waste  of  efficiency  in  selling  and  the 
consequent  enormous  promotion  expenses  made  it  impossible 
for  this  firm  to  realize  sufficient  profit  to  pay  a  dividend. 

It  is  well  known  that  usually  the  expense  of  marketing 
equals  100  per  cent,  of  all  the  other  factors  entering  into  the 
cost  of  an  article,  and  in  cjuite  a  number  of  cases  the  propor- 
tion is  even  greater. 

This  being  so,  it  is  evident  that,  in  order  to  approach  the 
question  of  marketing  any  particular  material,  it  is  necessary 
that  the  basic  information  should  be  at  hand.  This  should  be 
arranged  in  such  shape  that  an  intelligent  investigation  can 
be  made  with  a  view  to  approaching  the  marketing  of  the 
product  with  a  high  degree  of  efficiency. 

It  may  be  contended  that  the  advertising  manager,  deal- 
^,  . ,  ing  with  only  a  portion  of  the  selling  ciuestion, 
vertising  '^^  ^^t  interested  in  the  development  of  a  number  of 
Manager  these  factors.  It  is  true  that  the  development  of 
and  the      most  of  the  factors  should  naturally  fall  upon  the 

Sa/es       head  of  the  sales  department;  but  it  is  just  as  true 

anager  ^^^^  ^g  ^  tvXq,  the  advertising  manager  is  in  the  best 
position  to  make  such  investigations  and  secure  the  information 
along  these  lines.  Except  in  the  notably  efficient  selling  organi- 
zations which  stand  out  as  unusual  monuments  of  efficiency, 
the  sales  manager  has  been  a  successful  salesman  with  a  turn 
for  executive  management.  For  a  number  of  years  selling 
has  been  to  him  a  succession  of  individual  deals  and  the  general 
marketing  has  been  the  result  of  these. 

As  a  matter  of  fact,  precisely  the  reverse  should  be  the  case 


SELLING  PROBLEMS  27 

if  the  subject  is  properly  approached.  The  individual  deal 
and  the  success  of  this  deal  is  the  result  of  an  intelligent  market- 
ing scheme. 

Furthermore,  the  sales  manager  has  been  commonly  limited 
in  his  viewpoint  by  the  necessity  for  showing  a  certain  amount 
of  sales  within  a  specified  period  (say  six  months  or  one  year) 
at  a  certain  percentage  cost  of  selling.  This  has  the  effect  of 
preventing  him  —  unless  he  is  unusually  farsighted  —  from 
viewing  the  marketing  scheme  over  a  series  of  years  and  having 
in  view  rather  the  ultimate  effect  than  the  balance  in  his  favor 
over  a  short  current  period.     .     .     . 

This  question  of  the  exact  method  of  procedure  in  an  analysis 
of  this  kind  is  a  most  vital  one.  It  would  require  an  entire 
book  merely  to  outline  all  the  methods  of  getting  data  for  even 
the  most  common  cases.  In  almost  every  line  some  data  are 
available,  and  others  are  almost  or  quite  inaccessible.  Even 
if  all  the  facts  were  available,  no  two  advertisers  would  use 
them  with  equal  skill.  Mr.  Ward's  experience  in  analyzing 
the  New  York  bread  market,  for  instance,  will  not  be  useful 
in  toto  to  anybody  else  —  even  a  rival  New  York  baker.  But 
the  fact  that  he  did  make  such  an  analysis  and  the  way  he  went 
at  it  ought  to  be  suggestive  to  every  advertiser  everywhere. 

Not  forgetting  the  importance  of  the  goods  nor  of  the  nature 
of  the  consuming  market  as  factors  in  determining  the  advertis- 
ing plan,  forms  and  methods,  it  is  our  purpose  in  this  study  to 
centre  our  chief  attention  on  the  third  element  —  the  distri- 
bution system  —  and  see  whether  we  can  pick  out  some  of  the 
more  salient  points  in  that  as  they  bear  on  the  practical  problems 
of  advertising. 

REVIEW  QUESTIONS CHAPTER  I 

1.  What  did  the  bean-canner  find  was  the  trouble  with  his 
advertising  campaign?  (a)  In  the  first  investigation?  (b)  In 
the  second? 

2.  (a)  What  are  the  main  divisions  of  the  Fowler  plan  of 


28  ADVERTISING  AS  A  BUSINESS  FORCE 

analysis?     (b)  Of  the  Wadsworth  plan?     (c)  Of  the  Murphy 
plan? 

3.  Which  of  these  plans  helps  you  to  get  the  clearest  idea 
of  your  own  advertising  problems? 

4.  How  did  the  Ward  Baking  Company  make  sure  that  its 
advertising  would  sell  bread? 

5.  Do  you  think  Mr.  Tipper's  list  of  "factors"  could  be 
reduced?     Ought  it  to  be  added  to? 

PROBLEM  QUESTIONS  —  CHAPTER  I 

1.  In  Mr.  Fowler's  plan  for  analysis  of  the  product  he  has 
a  place  for  profit  to  various  factors  in  the  selhng  mechanism. 
What  does  he  apparently  mean  by  this?  Gross  mark  up,  or 
net  profit? 

2.  How  does  this  bear  on  the  advertising  plan?  For  in- 
stance, if  a  manufacturer  of  a  hardware  specialty  retailing  for 
25  cents  could  manufacture  100,000  at  a  cost  of  7  cents  each, 
and  500,000  at  a  cost  of  5  cents  each,  what  effect  would  this 
have  on  his  plans  for  creating  demand? 

3.  Carefully  compare  the  methods  of  analysis  described 
in  this  chapter.  Choose  the  elements  from  each  which  you 
consider  best  adapted  to  your  case  and  work  out  an  analysis 
of  your  o\\Ti  selUng  problems  as  they  affect  your  advertising 
campaign. 

4.  Do  you  think  the  "Buying  Motives"  in  Mr.  Murphy's 
chart  include  all  the  motives  necessary  for  consideration? 

5.  Suppose  that  after  he  had  made  his  first  investigation, 
the  bean-canner  (p.  3)  had  found  that  it  was  going  to  cost  him 
$200,000  to  reach  the  80  per  cent,  of  his  market  hitherto  un- 
touched, what  new  elements  would  this  discovery  make  it 
necessary  for  him  to  consider? 


CHAPTER  II 

THE   DISTRIBUTION   SYSTEM 

DISTRIBUTION  for  retail  consumption  calls  for  two 
main  steps  between  the  producer  and  the  consumer. 
The  first  is  the  step  by  which  the  product  is  moved 
in  bulk  to  large  distributing  centres  and  there  held  ready  for 
The  Two     ^^^®  ^^  dehvery  to  the  type  of  house  engaged  in  per- 
Stefs  in     forming  the  second  step.     This  work  may  be  done  in 
tion\or     ^  single  move,  or  it  may  involve  a  series  of  transac- 
Retail      tions — all  performed,  however,  at  wholesale.     The 
tion^-^the  performers  of  this  work  are  variously  known  as  whole- 
Whole-      salers,   jobbers,  or  by  other  names  in  some    trades 
*"  ^'^       where  their  methods  involve  a  certain  amount  of 
consigTiment  business.     The  large  term  "Middleman"  covers 
them    all.     Their    services    are    primarily   commercial   rather 
than    productive.      Furthermore,   these  services  are  difficult, 
somewhat    hazardous,   and    when    the   producers    are    highly 
localized  and  the  retailers  small  and  scattered,  these  services 
are  undeniably  necessary,  and  call  for  special  equipment  and 
skill. 

The  second  step  in  distribution  for  retail  consumption  is  that 
by  which  the  goods,  divided  into  small  units,  pass  out  of  trade. 
The  Place  "^^^^  retailer,  who  performs  this  service,  needs  no  ex- 
of  the  planation.  This  brief  summary  blocks  in  the  main 
^  "^  ^^  steps  in  distribution  of  goods  selling  at  retail,  but  in 
few  cases  is  the  actual  situation  as  simple  as  this.  It  is  the 
main  object  of  this  compilation  to  show  how  necessary  to 
the  advertiser  is  an  adequate  appreciation  of  the  actual  con- 
ditions in  distribution;  in  other  words,  an  understanding  of 

29 


30  ADVERTISING  AS  A  BUSINESS  FORCE 

what  is  involved  in  the  relations  of  the  parts  of  the  modern 

distribution  mechanism  to  each  other. 

If  conditions  of   life  were  stable,  if  cities  were  not  growing 

larger  and  more  numerous,  if  transportation  facilities  for  goods 

and  people  still  kept  retail  trading  units  small  and 

The  Chaos  isolated,  this  two-parted  system  of  distribution  would 
m  Distn-  ,  .  1  /T  T. 

hution     be  working  away  without  conflict  or  trouble.       But 

the  real  conditions  are  quite  the  reverse  of  this 
imaginary  combination,  and  as  a  result  some  retailers  grow 
large  and  become  independent  of  the  wholesale  distrib- 
utors, while  others  remain  small  and  still  need  the  services 
of  those  functionaries.  Some  wholesalers,  too,  change  their 
position  by  undertaking  manufacturing  or  retailing  or  both. 
And  as  a  result,  the  whole  system  of  distribution  for  goods 
consumed  in  small  units  is  in  an  unsettled  state. 

Advertising,  as  an  influence  aimed  at  consumer  direction 
and  control,  is  obhged,  at  every  turn,  to  face  some  expression 
of  this  conflict,  and  a  firm  grasp  of  the  more  important  features 
of  the  situation  is  essential  to  advertising  success.  No  matter 
whether  the  advertising  be  undertaken  by  the  producer  who 
attempts  to  modify  the  whole  distribution  plan  for  his  goods, 
or  by  the  middleman  or  retailer  who  deals  with  only  a  part  of 
the  system,  the  need  is  equally  urgent. 

Under  the  title  of  "The  Mix-up  About  the  Jobber,"  a  series 
of  articles  by  Raymond  W.  Gage  appeared  in  1910  which  give 
a  statement  of  some  phases  of  the  conflict.  {Printers'  Ink, 
August  11,  1910,  p.  8;  August  18,  1910,  p.  11;  September  22, 
1910,  p.  29.)  The  following  paragraphs  are  taken  from  these 
articles. 

THE   STATE   OF   CHAOS 

*The  jobber  is  one  of  the  very  stiflest  problems  facing  manu- 
factures.    .     .     . 
What  is  the  trouble? 
Ask  this  question  of  the  manufacturer,  the  jobber  and  the 

*  Printers  Ink,  August  11,  1910,  p.  8. 


THE  DISTRIBUTION  SYSTEM  31 

retailer  successively  and  you  ascertain  the  "other  fellow  is  to 
blame." 

"If,"  says  the  manufacturer,  "Jones,  the  jobber,  hadn't  put 

out  his  private  brand,  in  competition  with  mine,  I  wouldn't 

have  had  any  fault  to  find.     He's  pushing  his  own 

^^f  p^T*  goods  and  at  the  same  time  handling  mine.   He  won't 

Step  ^^t  ^^^  know  where  my  own  goods  are  for  sale,  for 
fear  I'll  go  over  his  head  to  the  retailers.  Conse- 
quently, between  inability  to  stimulate  and  help  my  dealers, 
and  the  jobber  naturally  pushing  his  own  brand  in  preference, 
I'm  up  a  tree,  and  I'll  go  direct  to  the  retailer,  if  he  doesn't 
come  to  time." 

"If,"  says  the  jobber,  "Martin,  the  manufacturer,  hadn't 
cut  me  out  and  gone  over  my  head  direct  to  the  retailer,  I 
wouldn't  have  put  out  my  private  brand." 

"If,"  says  the  retailer,  "Jones,  the  jobber,  hadn't  gone  also 
into  the  retailing  business  I'd  not  have  accepted  the  direct 
prices  of  the  manufacturer  and  wouldn't  have  gone  into  the 
field  of  wholesaling,  too." 

The  jobber,  the  manufacturer,  and  the  retailer  are  interchang- 
ing functions.  Park  &  Tilford  are  retailers,  with  a  chain  of 
stores,  as  well  as  jobbers.  Francis  H.  Leggett  &  Co., 
The  Inter-  ^f  New  York,  are  becoming  advertising  manufacturers 
Functions  ^^  Premier  products,  as  well  as  jobbers.  Here  are 
two  jobbers  reaching  both  ways,  causing  dissatisfaction 
to  the  manufacturer  and  the  retailer  alike. 

The  manufacturer,  in  order  to  have  a  finger  in  the  messing  up 
of  the  situation,  has  been  known  not  only  to  go  over  the  jobber, 
to  the  retailer,  but  also  to  jump  at  once  to  the  consumer.  An 
example  is  Browning,  King  &  Co.,  clothing  manufacturers  and 
retailers,  in  fifteen  cities. 

Of  course,  the  retailer  couldn't  stand  all  of  this  meekly. 
So,  we  see  in  the  James  Butler  string  of  grocery  stores  a  retailer 
who  demands  jobbers'  prices  of  the  manufacturer  and  who  is 
even  doing  some  of  his  own  manufacturing.  Marshall  Field 
&  Co.,  of  Chicago,  do  a  large  jobbing  business.  Wanamaker's, 
of  New  York,  has  just  organized  a  wholesale  department.  All 
these  were  at  first  retailers. 

It  is  easy  enough  to  see  why  this  taking  one  of  another's 
functions  should  be  regarded  as  something  of  more  than  aca- 
demic trade  interest.  As  a  matter  of  fact,  it  is  a  profoundly 
vital  condition. 


32  ADVERTISING  AS  A  BUSINESS  FORCE 

If  James  Butler  can  buy  groceries  direct  from  the  manufac- 
turer at  jobber's  discounts,  how  can  the  Httle  retailer  on  the 
The  Large  corner,  who  is  strictly  minding  his  own  business  as 
vs.  retailer,  possibly  compete?  Butler  can  sell  his  goods 
the  Small  at  prices  that  are  "cost"  to  the  little  fellow.   And  the 

Buyer  Yi\x\q  fellow  must  live.  He,  therefore,  is  doing  his 
part  in  stirring  up  the  dust  and,  by  association  with  other 
little  fellows,  putting  himself  on  even  buying  terms  with 
Butler.  Those  department  stores  that  get  jobbers'  discounts 
are  also  regarded  as  just  as  full  of  threat  to  the  retailers'  busi- 
ness. 

For  their  part  such  enterprises  as  those  of  Butler  grit  their 
teeth,  mutter  something  about  "competition  of  jobbers"  and 
"survival  of  the  fittest."  Indeed,  the  department  stores, 
Butler,  et  al.,  insist  that  they  must  have  the  jobbers'  discount 
or  they  can't  do  business  in  competition  with  the  retailing 
jobber.  Macy's,  or  Saks',  or  Marshall  Field's,  or  the  May 
Department  stores  seem  to  have  some  justification  in  their 
explanation  in  view  of  the  invasion  of  the  retail  field  by  the 
powerful  H.  B.  Claflin  interests.     .     .     . 

It  is  a  battle  of  giants,  and  the  little  fellow,  buying  without 
any  discount,  can  only  sense  the  lump  in  his  throat  and  grab 
at  the  crumbs  of  patronage  that  are  thrown  his  way.  If  it  is 
going  to  be  his  fate  to  be  blotted  out,  he  must  get  such  comfort 
as  he  can  from  the  fact  that  he  went  down  in  a  pitifully  unequal 
conflict,  not  with  men,  but  with  natural  economic  forces  that 
tend  to  crush  their  path  to  the  consumer  by  the  shortest  and 
the  cheapest  route. 

And  above  all  looms  the  manufacturer.      Altogether  he  is 

the  strongest  factor  in  the  fight.    If  he  is  an  advertising  manu- 

facturer  (and  it  is   the  advertising  manufacturer  we 

Manufac-  ^^^  considering)    he  rules  the  situation,   in   the   last 

iuj.gr analysis.     He   has   made  his   goods  known,  through 

His       their  trade-mark,  to  consumers.     He  is  the  maker  of 

Troubles    \\^q  things  which  this  country  eats,  wears,  sleeps  on. 

Solution    P^^y^  with,  and  works  with.     Demand  is  the  voice  to 

which  all  listen,    and  substitution  can  only  make  a 

feeble  effort  to  resist  or  modify  it. 

The  manufacturer  in  many  cases  is  acting  the  jobber  for 
himself.  Heinz's  57  Varieties  don't  get  on  to  pantry  shelves  by 
the  jobber  road.  They  go  from  manufacturer  to  storekeeper. 
So  with  Kirkman's  soaps,  so  with  much  trade-marked  clothing, 


THE  DISTRIBUTION  SYSTEM  33 

so  with  National  Biscuit;  so,  to  some  extent,  with  Armour  &  Co. 
and  their  canned  goods.     And  these  are  only  a  few. 

But,  as  a  rule,  it  is  certain  that  most  manufacturers  would 
prefer  to  sell  through  the  jobber  to  any  other  method.  It 
saves  them  having  direct  relations  with  thousands  of  retailers. 

To  be  sure,  there  are  some  specialty  manufacturers  who 
would  sell  direct  to  the  retailer,  whatever  the  conditions. 
Heinz,  with  his  distributing  stations  and  salesmen,  is  in  position 
to  put  his  pickles  into  the  hands  of  the  groceryman  very  quickly 
and  therefore  in  a  fresh  state.  Also,  the  National  Biscuit 
Company's  crackers  and  wafers  don't  tarry  on  their  way  so 
long  from  manufacturer  to  retailer  direct  as  they  would  if  they 
had  a  jobbing  house  as  a  relay  station. 

But  the  fact  that  some  companies  have  tried  relations  with 
the  retailers  and  got  sick  of  it  is  proof  of  the  general  feeling. 
The  Columbia  Conserve  Company  is  an  example.  Yet  one 
who  is  prone  to  argue  the  case  for  the  jobbers'  elimination  can 
dig  up  strong  points.  The  Lisk  Manufacturing  Company,  of 
Canandaigua,  N.  Y.,  maker  of  enamel  ware,  has  been  doing 
a  direct-to-retailer  business.  It  has  25,000  accounts,  it  is 
stated,  and  is  in  a  most  flourishing  condition  and  well  satisfied 
with  itself. 

Many  jobbers  have  grown  to  wealth  in  the  course  of  years. 

After  a  generation  or  two  of  often  absolute  control  over  the 

retailer  it  would   perhaps  be  expecting   too  much  to 

^^'!  P/"*^^  have  them  all  renounce  their  claims  to  supremacy  still. 

""of  t)^^^  Complaints  arise  from  many  quarters  that  the  jobber 

Jobber     is  too  dictatorial,  that  he  ought  to  be  shown  that  he 

is  not  the  indispensable  fellow  he  thinks  he  is. 

But  efforts  to  oust  him  are  as  certain  as  fate  to  be  fought 
bitterly  and  skilfully.  Some  jobbers  possess  the  retailers,  body 
and  soul.  Small  storekeepers,  and  sometimes  the  larger  ones, 
have  been  advanced  goods  by  the  jobber  until  the  jobber  really 
owns  them.  In  what  position  are  such  retailers  to  put  up  a 
restraining  hand  to  the  domineering  wholesaler? 

Entrenched  with  capital  and  influence  with  the  trade,  the 
jobber  is  also  a  dispenser  of  business  to  the  manufacturer. 
Not  the  advertising  manufacturer,  usually,  but  that  other  who, 
hungry  for  orders,  snaps  up  avidly  a  commission  to  make  for  a 
jobbing  house  a  line  of  private  brand  goods. 

Such  manufacturers  frequently  find  themselves  in  trouble. 
Not  long  ago  a  manufacturer  of  edged  tools  received  a  noti- 


34  ADVERTISING  AS  A  BUSINESS  FORCE 

fication  from  a  certain  jobber  that  the  latter  would  not  renew 
his  contract  for  the  private  brand  goods.  The  manufacturer  had 
been  making  these  from  time  out  of  mind  and  the  future 
seemed  rosy.  He  had  been  getting  only  a  small  margin  of 
profit,  but  he  had  made  money.  With  his  one  customer  gone, 
what  could  he  do.^*  His  goods  had  not  been  advertised  and  he 
had  no  standing  with  consumers.  The  jobber  had  not  only 
taken  the  goods  but  also  the  credit,  among  the  trade,  for  the 
product.  That  manufacturer  had  a  very  painful  half-year. 
But  he  has  learned  his  lesson,  for  he  is  now  advertising  and  is 
establishing  himself  with  the  general  public,  which  is  not 
liable  to  drop  him  a  curt  note  and  take  away  his  market  be- 
tween the  time  he  opens  his  desk  and  the  hour  he  goes  to 
lunch.     .     .     . 

*A  jobber  that  has  private  brands  to  sell  in  competition  with 
those  of  houses  that  advertise  must  walk  a  very  straight  line 
to  avoid  falling  under  the  suspicion  of  the  manufacturer. 
Some  jobbers  hate  protected  prices.  Dickering  and  trade 
deals  and  secret  bargains  have  been  the  rule  so  long  in  former 
days  that  jobbing  houses  which  are  in  a  rut  cannot  understand 
the  spirit  of  the  new  era.  Some  of  them  will  go  to  shameful 
lengths  to  undermine  the  sales  of  a  widely  advertised  brand. 
But  manufacturers  like  Procter  &  Gamble,  the  Shredded 
Wheat  Biscuit  Company,  Kellogg's  Toasted  Corn  Flake  Com- 
pany and  the  Cream  of  Wheat  Company,  who  have  got  their 
fighting  spirit  up,  are  making  things  unpleasant  for  those 
jobbers  who  are  "putting  sand  into  the  gear  box." 

Jobbers  and  those  who  buy  at  wholesale  discounts  often  strike 
viciously  to  uphold  old  practices.  The  Kroeger  Grocery  &  Bak- 
ing Company,  of  Cincinnati,  became  peeved  because  Procter  & 
Gamble  wouldn't  sell  Ivory  Soap  to  them  at  a  discount  and 
threatened  to  build  their  own  soap  plant,  evidently  expecting  to 
get  the  Ivory  Soap  people  "on  the  run"  right  away.  This  is 
similar  to  the  alleged  threat  of  Austin,  Nichols  &  Co.,  New  York 
jobbers,  to  start  a  cereal  plant  to  make  Toasted  Corn  Flakes 
because  Kellogg  refused  to  make  them  preferred  buyers.  Austin, 
Nichols  &  Co.  cannot  now  obtain  Kellogg's  Corn  Flakes,  nor  can 
Francis  H.  Leggett  &  Co.,  of  New  York,  another  wholesale 
house.  Austin,  Nichols  &  Co.,  have  made  good  in  part  their 
threat  by  taking  on  Doctor  Kellogg's  Toasted  Rice  Flakes  and 
"boosting"  them  for  all  they    are  worth  through  the  trade. 

*Printers'  Ink,  August  18,  1910,  p.  11. 


THE  DISTRIBUTION  SYSTEM  35 

There  has  been  a  hot  fire  of  form  letters  from  both  the  W.  K. 
Kellogg  Company  and  from  Austin,  Nichols  &  Co.  upon  the 
retailer,  as  a  result.  Concealing  the  anger  he  must  have  felt, 
W.  K.  Kellogg  has  been  treating  the  matter  in  a  humorous 
way,  trusting  to  his  price  policy,  his  reputation  in  the  trade,  and 
the  consumer  demand  to  carry  the  day  for  him.     .     .     . 

The  situation  in  the  grocery  specialties  field  is  not  essentially 
different  from  that  in  most  of  the  other  lines  of  trade.  An 
authority  in  the  jewelry  field  in  New  York  predicted  that  the 
jewelry  jobber  would  be  out  of  business  in  five  years.  The 
*  *  *  *  goods  lend  themselves  readily  to  mail  shipment 
direct  to  the  consumer  or  a  straight  delivery  to  the  retailer. 
One  influence  that  may  keep  the  jewelry  jobber  doing  busi- 
ness in  spite  of  predictions  is  that  the  average  retail  jeweler 
cannot  use  the  quantity  of  merchandise  which  would  enable 
him  to  buy  direct  of  the  manufacturer.  A  stock  of  jewelry  is 
tied  up  for  a  relatively  long  time  in  the  retail  shop,  and  a  direct 
buying  is  often  rendered  difficult  from  the  inability  of  the  re- 
tailer to  command  sufficient  capital. 

Manufacturers  of  goods  that  bulk  large  do  not  predict  the 
extinction  of  the  jobber.  The  jobber  is  deemed  to  be  a  neces- 
sity as  a  distributor.  But  what  manufacturers  will  bend  all 
their  energies  to  remedy  is  the  backwardness  of  the  jobber  in 
rendering  the  fullest  possible  co-operation.     .     .     . 

THE   CAUSE   OF   THE   TROUBLE 

*The  whole  mix-up  has  been  caused  by  the  attempt  of  some 

manufacturer  or  wholesaler  to  cut  out  one  or  more  steps  in  the 

old-time  distributive  process,  which  was  from  manu- 

r^^^ff  i°  facturer  to  jobber,  to  retailer,  to  consumer.     The  con- 

gigjj  sumer  holds  the  key  — he  will  buy  where  he  can  get 
the  best  goods  cheapest.  While  this  tendency  is  one 
of  the  most  natural  in  the  world,  it  has  developed  strife  and 
ill-feeling  to  a  remarkable  degree.  Caught  in  the  swirl  of 
changing  trade  currents,  every  factor  concerned  has  at  times 
turned  upon  another,  accusing  it  of  being  at  the  bottom  of  the 
whole  trouble. 

But  companies  which  have  spent  many  years  in  establishing 
selling  policies  are  not  able  to  change  them  over-night.     They 

^Printers'  Ink,  September  22,  1910,  p.  29. 


36  ADVERTISING  AS  A  BUSINESS  FORCE 

must  adapt  slowly  and  change  selling  habits  with  exceedingly 
farsighted  eyes. 

Thus  the  jobbers  are  finding  themselves  bulwarked  by  sev- 
eral very  important  and  powerful  manufacturers.  The  lat- 
ter are  not  ready  to  change  the  channels  of  distribution  —  it 
would  throw  their  business  into  confusion. 

One  overshadowing  concern  marketing  its  product  through 
the  jobber  has  done  yeoman's  work  in  trying  to  give  stability  to 
a  situation  which  economically  is  tending  to  a  gradual 
Different  change.  The  change  looks  to  the  elimination  of  the 
Toward  jobber  or  the  lessening  of  his  functions.  This  con- 
the  Jobber  cern  is  the  Diamond  Match  Company,  which  is  said 
to  control  90  per  cent,  of  the  match  trade  of  the 
United  States.  It  emphatically  insists  upon  price-mainte- 
nance and  upon  selling  through  the  jobber.  It  is  interesting  to 
note  that  the  Diamond  Match  Company  believes  in  the  "free 
deal,"  for  its  policy  has  been  to  give  one  case  free  for  every  ten 
ordered;  lately,  because  of  competition  in  certain  districts,  it  is 
giving  one  case  free  in  five.  By  countenancing  this  practice  it 
sets  itself  in  opposition  to  the  Kellogg  Toasted  Corn  Flake 
Company,  which  sells  as  cheaply  to  the  small  buyer  as  to  the 
big  one.  Fred  Mason,  assistant  sales  manager  of  the  Diamond 
Match  Company,  says  he  cannot  see  the  wisdom  of  adopting  a 
policy  which  would  lose  for  him  the  services  of  70,000  jobbers' 
salesmen.  It  is  his  policy  not  to  sell  to  the  big  retailer  or  the 
chain  store  direct;  indeed,  he  has  found  that  only  15  per  cent, 
of  the  total  supply  of  matches  is  sold  through  chain  stores  or 
buying  associations. 

The  Babbitt  Soap  Company  also  believes  in  the  quantity 
buying  price.  It  has  a  price  for  100  cases,  for  fifty  cases  and 
for  twenty  cases.  There  is  a  strong  feeling  abroad  in  the  trade 
that  the  quantity  prize  will  prevail,  and  that  Kellogg's  fixed 
price  policy  is  unnatural.  One  man  active  in  a  state  retail  as- 
sociation asked  if  Kellogg  bought  on  the  same  principle,  or 
whether  he  demanded  a  lower  price  on  his  cartons  the  more  he 
bought.  He  said  that  Kellogg  himself  bought  according  to  one 
plan  and  sold  according  to  another.  Furthermore,  he  felt  that 
the  sooner  the  leaders  could  unite  upon  some  common-sense 
principle  in  accordance  with  reason  the  quicker  a  confused 
situation  would  right  itself.  One  notable  thing  about  the 
jobber's  mix-up  is  the  convincing  quality  of  the  opinions  held 
by  the  opposing  forces. 


THE  DISTRIBUTION  SYSTEM  37 

THE   DILEMMA   OF   THE   RETAILER 

Mr.  Gage's  summary  of  the  situation  makes  it  clear  that,  while 
the  "mix-up"  may  be  primarily  about  the  jobber,  the  retailer 
is  by  no  means  free  from  worries.  As  a  matter  of  fact  it  is  a 
serious  question  whether  the  jobber  or  the  small  retailer  is  in  the 
worse  strait. 

The  dilemma  as  it  bears  on  the  grocery  retailer  is  described 
in  an  article  in  Advertising  and  Selling,  which  contains  a  serious 
truth  in  a  somewhat  jovial  exterior,  and  while  the  retailer's 
position  may  be  different  in  various  trades,  the  troubles  of  the 
grocery  man  are  suggestive  of  what  is  to  be  found  in  many  dif- 
ferent lines: 

.     .     .     .     *Take  the  retail  grocery  trade  the  country  over 
and  find  the  fortunes  made  in  it  compared  with  other  fields 
of   retail   endeavor.       There   are   more   second   and 
Trade"in    ^^^^^  generations   driving  automobiles   and  playing 
Which  Few  polo  because  of  success  in  drygoods  and  hardware  re- 
Fortunes    tail  merchandising  than  in  the  retail  grocery  business. 
^"^M  ^/^^       Why  is  it.f*     Well,  there  are  reasons  aplenty,  and 
"  ^       maybe  as  important  a  one  as  any  is  the  fact  that  the 
retail  grocery  business  is  wofuUy  overdone.     A  successful  retail 
grocer  must  be  a  very  intelligent  merchant.     He  must  be  a 
careful  buyer  and  an  equally  careful  seller.     Of  course  that 
applies  to  every  business  that  prospers,  but  in  a  grocery  busi- 
ness where  many  profits  are  small  and  individual  sales  small 
too,  with  cut-rate  prices  until  the  merchandise  fairly  bleeds,  and 
with  a  delivery  system  which  greatly  increases  the  overhead 
expense,  the  retail  grocery  sometimes  does  well  to  break  even. 
What  has  all  this  to  do  with  advertising.?  you  ask.     Well,  it 
has  a  lot  to  do  with  advertising,  and,  in  the  first  place,  more  to 
do  with  selling.       The  retail  grocer  is  the  natural  dis- 
Adverhsed  tributing  outlet  for  the  food  products  advertised  so 
the  Retail  generously  in  the  standard  and  women's  magazines  of 
Grocer     the  United  States.      The  retail  grocer  is  in  most  cases 
a  very  important  link  in  the  manufacturer's  chain. 
The  food  specialty  producer  usually  sells  to  the  jobber,  who  in 

*"How  Would  You  Like  to  Be  a  Groceryman?"  ByWalter  Bernard  Cherry, 
{Advertising  and  Selling,  June,  1910,  p.  59). 


38  ADVERTISING  AS  A  BUSINESS  FORCE 

turn  supplies  the  retailer,  and  the  retailer  takes  care  of  the 
consumer.  The  manufacturer's  dealings  with  the  jobber  are 
greatly  facilitated  because  the  wholesale  grocery  trade  is  per- 
haps the  most  healthful  of  all  jobbers.  But  the  retailer  takes 
long  chances  on  credit  and  carries  a  multiplicity  of  items  which 
increase  his  investment  and  sometimes  fail  to  help  his  profits. 

The  specialty  manufacturer  of  food  products  with  a  national 
distribution  naturally  turns  to  the  advertising  mediums  of 
national  circulation  for  his  publicity.  He  tells  his  story  to  the 
enormous  magazine-reading  public  in  a  maximum  way  for  a 
minimum  cost,  all  things  considered.  Naturally  the  specialty 
manufacturer's  distribution  is  first  to  be  considered.  There  are 
approximately  240,000  retail  grocers  and  general  storekeepers 
in  the  United  States.  General  stores  usually  carry  groceries. 
Of  this  total,  190,000  grocers  and  general  stores  are  in  the  small 
cities,  and  50,000  stores  in  the  larger  cities.  The  sale  of  food 
products  over  the  grocer's  counters  is  naturally  regulated  by  the 
available  public,  and  it  is  a  well-known  fact  that  some  food 
products  sell  better  in  the  smaller  cities  than  in  the  larger  cities. 

When  a  manufacturer's  distribution  of  his  specialty  is  com- 
plete, and  a  representative  number  of  retail  grocers  have  stocked 
the  goods  through  the  jobbers,  the  manufacturer's  national 
advertising  campaign  starts.  It  naturally  produces  business 
because  we  assume  the  product  is  right  and  is  subject  to  a 
natural  demand,  logically  increased  by  publicity  and  the  very 
quality  of  the  merchandise.  Mr.  Advertiser's  campaign  may 
be  tremendously  effective  in  his  mind  and  in  his  agent's  mind, 
and  yet  it  is  a  very  difiicult  problem  for  both  principal  and  agent 
to  solve,  when  heavy  space  is  bought  in  the  big  magazine  of 
one  million  circulation  which  goes  everywhere  and  must  help 
the  sale  of  this  piece  of  merchandise  wherever  it  is  stocked. 
But  how  much  does  it  help?     Who  can  tell.'     . 

We  might  liken  the  general  publicity  for  a  food  product  stock 
in  240,000  retail  outlets  to  the  firing  of  a  locomotive.  We  can 
never  tell  which  single  ad  in  a  national  magazine  campaign  sells 
one  or  ten  packages  of  None  Such  Mince  Meat  in  Kankakee, 
Keokuk,  Kokomo,  or  Kalamazoo,  but  we  know  the  goods  sold, 
and  that's  the  answer.  We  cannot  tell  which  shovel  of  coal 
heaved  into  the  furnace  of  No.  3972  took  the  flying  Empire 
State  Express  any  single  mile  between  Syracuse  and  Utica ;  but 
we  know  the  train  moved,  and  we  know  if  we  took  out  some  of 
that  national  magazine  campaign,  we  would  be  very  apt  to  feel 


THE  DISTRIBUTION  SYSTEM  39 

it  in  our  sales;  and  we  also  know  that  if  Mr.  Fireman  became 
peevish  and  stingy  with  his  coal  old  3972  would  ease  off  and 
begin  to  touch  some  others  than  the  high  places  on  her 
journey.     .     .     . 

But  how  about  the  grocery  man.?     Have  you  ever  been  in  a 

grocery  store  and  counted  the  various  brands  of  merchandise 

he  carries  .f*  Shut  your  eyes  and  think  of  a  grocery  store 

The      you  know.    I  will  warrant  that  on  that  grocer's  shelves 

National      ^^  ^'u  gj^j  fifteen  kinds  of  cereals,  twelve  sorts  of 

ing  of     soap,    six  different   brands  of  baking-powder,    many 

Groceries  varieties  of   extracts,   tinned  soups,   fish   and   other 

Deter-     edibles.      .     .     .      Do  all  these  various  brands  sell  in 

^ar7  r'^^  equal  proportions.?^      Hardly  that.      The  advertised 

Stock      brands  sell,  and  the  retail  grocers  tell  us  that  the 

Selection   brands  whose   advertising   is   continuous,   consistent 

and  everlasting  are  the  steady,  plugging  sellers  and 

are  most  often  called  for  by  brand  name. 

Mr.  Cherry's  article  brings  out  clearly  one  of  the  many  phases 
of  the  present  disturbed  condition  in  one  branch  of  retail  busi- 
ness. The  effect  of  national  advertising  on  the  retail  grocer's 
stock  is  only  a  surface  indication  of  a  radical  change  wrought  by 
this  single  form  of  advertising  on  the  whole  selling  system. 

THE  retailer's   STRATEGIC   POSITION 

Another  aspect  of  the  retailer's  position  is  presented  by 
George  L.  Louis,  of  Chicago,  in  an  article  in  System.  Mr.  Louis 
takes  the  ground,  that  while  th,e  retailer  may  be  in  trouble,  his 
place  in  the  distribution  system  is  the  vital  one,  and  that  the 
solution  of  the  present  strained  condition  lies,  not  in  the  elimina- 
tion of  any  part  of  the  present  distribution  system,  but  in  more 
careful  planning  and  better  co-ordination  of  the  various  ele- 
ments of  distribution.  This  is,  in  a  large  measure,  the  work  of 
the  advertising  man: 

*Many  manufacturers  have  been  led  to  assume  .  .  . 
that  the  "  created  demand"     .     .     .     will  close  sales  and  pre- 

*System,  June,  1912,  p.  584. 


40  ADVERTISING  AS  A  BUSINESS  FORCE 

vent  substitution.  The  demand  of  the  consumer  is,  it  is 
claimed,  the  pivot  upon  which  distribution  revolves,  and  this 
consumer's  demand  alone  is  sufficient  to  bring  about  the  co- 
operation of  the  dealer. 

What  is  commonly  termed  "created  demand"  is,  in  my  opin- 
ion, no  more  than  a  primary  selling  influence.  In  itself  it  is  not 
sufficient  to  make  sales.  Psychologists  tell  us  that  sales  are 
made  by  a  process  of  elimination;  the  consumer  does  not  argue, 
"Why  I  should  buy,"  but  questions,  "Why  should  I  buy?" 
Advertising  that  starts  this  reasoning  is  only  a  preparation; 
something  more  tangible  than  printed  words  or  pictures  must 
be  added  to  complete  the  sale. 

In  a  series  of  one  hundred  instances  where  consumers  were 
watched  to  note  how  and  why  they  bought  advertised  goods, 
eighty-three  couched  their  first  question,  "Have  you  so-and-so.^ " 
and  seventeen,  "I  want  so-and-so."  This  shows  the  attitude 
of  the  average  purchaser  when  entering  a  store  with  the  intent 
to  buy.  The  question  "Have  you  so-and-so?"  is  a  lead  for  the 
merchant  to  put  forth  his  final  and  necessary  sales  force.  The 
consumer  is  simply  in  an  interrogatory  attitude. 

With  his  direct  contact,  his  personal  influence,  and  his  final 

y^g        selling  talk,  the  retailer  is  the  power  that  concludes 

Retailer     sales.     The    influence   of    the   retailer   in    intimate 

Concludes    touch  with  the  consumers  is  far  greater  and  more  ef- 

the  Sale     fective  than  that  of  a  distant  manufacturer  whose 

appeal  is  by  means  of  the  printed  word  alone. 

No  matter  how  successful  selling  by  threat  may  have  been  — 
with  the  consumer  as  the  innocent  wielder  of  the  "big  stick"  — 
the  retailer  to-day  knows  his  power.  He  is  no  longer  susceptible 
to  anything  but  the  direct  approach,  with  goods  and  prices  as 
the  selling  basis.  This  does  not  mean  that  he  does  not  recognize 
and  appreciate  the  wonderful  aid  of  a  selling  campaign  directed 
by  the  manufacturer  at  the  consumer.  But  it  means  that  such 
a  campaign  as  a  selling  force  from  the  manufacturer  must 
follow  the  goods  and  not  precede  them  in  importance. 

In  order  to  verify  the  conclusion  that  the  dealer  is  the  court  of 
last  resort,  to  whose  influence  the  consumer  is  more  susceptible 
than  he  is  to  that  of  the  advertising  manufacturer,  the  experiment 
was  made  of  submitting  substitutes  for  a  number  of  widely  ad- 
vertised articles  now  before  the  public.  A  list  of  the  best  known 
advertised  goods,  clothing,  shoes,  toothbrushes,  saws,  food 
products,  soap  and  furniture,  was  used  as  experiments  by  re- 


THE  DISTRIBUTION  SYSTEM  41 

tailers  in  various  lines  for  my  benefit.  Without  one  exception, 
each  substitution  was  easily  efiFected.  I  was  rather  startled  at 
the  ease  and  quickness  with  which  it  was  done  in  all  instances. 

For  example,  a  woman  who  had  been  a  patron  of  a  certain 
grocery  store  for  many  years,  and  who  at  regular  intervals 
ordered  a  dozen  bars  of  a  well-known  advertised  soap,  gave 
a  list  of  the  items  she  desired  to  the  proprietor  of  the 
Substitu-  store.  When  she  mentioned  the  soap  he  produced  an 
tion  Is  unknown  brand  and  quietly  said:  "Try  this  instead  of 
the  that,  Mrs.  Brown;  it's  just  as  good."  ^  Mrs.  Brown 
Retailer  looked  at  him  curiously  for  a  moment  as  if  surprised  at 
the  suggestion,  met  his  firm,  assuring  glance,  then 
answered,  "All  right."  The  dealer  did  not  argue  or  say  any- 
thing detrimental  to  one  soap  or  in  favor  of  the  other. 

The  consumer  —  the  final  purchaser  —  is  in  direct  contact 
with  the  retailer.  To  distort  conditions  and  attempt  to  in- 
fluence the  consumer  directly  without  the  co-operation  of  the 
dealer  is  to  describe  a  circle  instead  of  a  straight  line  in  securing 
maximum  sales  at  minimum  cost. 

Yet  we  cannot  ignore  the  fact  that  the  influence  of  the  manu- 
facturer's selling  effort  is  a  tremendous  factor  in  selling  goods, 
and  that  it  minimizes  the  effort  and  energy  of  the  retailer  in 
closing  sales. 

An  analytical  survey  of  the  change  which  national  advertis- 
ing has  brought  about  leaves  no  question  of  its  value  to  both 
the  manufacturer  and  the  dealer.  If  the  grades  of 
What  Ad-  merchandise  made  and  sold  fifteen  years  ago  be  com- 
H^as^Done  P^^red  with  present  qualities,  a  startling  difference 
will  be  found.  And  when  we  compare  household 
equipment  now  in  common  use  with  that  of  previous  years  — 
electric  washers,  player  pianos,  sectional  bookcases,  and  the 
like,  with  their  progenitors  —  an  even  greater  contrast  is  seen. 

Now  the  cause  for  these  changes  cannot  be  traced  to  con- 
sumer initiative,  nor  can  the  dealer  be  credited  with  them. 
The  educational  work  which  inspired  the  final  buyer  to  appre- 
ciate the  betterments  has  been  almost  wholly  on  the  part  of  the 
producer  and  wholesaler. 

A  large  clothing  manufacturer,  discussing  this  angle  of  the 
question,  called  attention  to  a  ledger  of  1896,  which  showed  that 
the  clothes  bought  during  that  year  averaged  from  six  to  twelve 
dollars  per  suit.  There  were  few  fifteen,  eighteeen,  or  twenty- 
dollar  sales.     The  preponderance  of  sales  during  1911,  on  the 


42  ADVERTISING  AS  A  BUSINESS  FORCE 

other  hand,  ranged  from  eighteen  to  twenty -five  dollars.  In 
similar  fashion,  a  corset  manufacturer  sold  chiefly  twenty -five, 
thirty-five,  and  seventy -five  cent  models  eight  years  ago.  To-day 
he  does  not  manufacture  any  model  to  be  sold  under  one  dollar, 
and  the  majority  of  his  sales  are  from  three  to  five  dollars.  A 
maker  of  toilet  preparations  has  so  changed  his  lines  that  he 
appears  to  be  running  an  absolutely  different  business.  High- 
grade  dental  and  face  creams,  talcum  powders  and  toilet  soaps 
now  form  the  bulk  of  his  output. 

The  manufacturers  and  the  retailers  who  sell  their  products 
agree  in  attributing  the  change  in  consumer  buying  to  one 
cause  —  advertising.  In  studying  consumers,  therefore,  and 
learning  how  and  why  they  buy,  we  must  not  lose  sight  of  the 
advertising  manufacturer  and  the  effect  which  he  has  had  and 
is  still  having  in  stimulating  desire  for  and  appreciation  of 
quality  goods. 

The  fact  that  the  manufacturer  can  thus  influence  buying, 

„,    rj,        however,  does  not  justify  exclusive  attention  to  the 

Forces      consumer.     With  the  educational  force  of  the  manu- 

Which      f  acturer  and  the  intimate  selling  power  of  the  retailer 

Need  To     working  together,   we  have  the  combination  which 

^f.  ^°'j    promotes  maximum  buying.    If  either  fails  to  consider 

and  co-operate    with  the   other,  "problems"    begin 

to  arise  —  the  manufacturer's  problems,  dealer  problems,  and 

consumer  problems  —  which  make  waste  wherever  they  appear. 

When  the  manufacturer  bids  for  the  consumer's  attention 
directly  for  the  dealer,  consumer  buying  can  be  wonderfully 
promoted.  This  is  amply  illustrated  by  the  recent  change  in 
policy  of  a  large  concern  which  makes  medical  supplies.  This 
house  advertises  extensively.  Its  copy  has,  until  recently, 
terminated  with  a  coupon  request  that  entitled  the  sender  to  a 
sample  of  its  products  which  was  sent  to  the  inquirer  from  the 
factory.  Then  the  name  was  used  as  a  weapon  upon  the  drug 
store  of  the  town  from  which  it  came  to  show  a  demand.  The 
effect  of  this  method  upon  dealer  and  consumer  was  never 
satisfactory.  Some  three  months  ago  the  firm  tried  a  new 
method.  Dealers  were  liberally  supplied  with  samples,  and  the 
advertising  directed  the  public  to  go  to  the  local  drug  store  and 
get  them.  The  sales  to  dealers  and  from  dealers  to  final  buyers 
have  tripled  since. 

The  consumer  of  the  city  presents  a  problem  different  from 
and  more  difficult  than  those  of  the  small  town.     The  environ- 


THE  DISTRIBUTION  SYSTEM  43 

ments  are  different,  the  influences  are  different  and  the  results 
are  different.  The  selling  effort  in  the  metropolitan  centres 
has  been  so  intensified  that  it  is  always  at  a  white 
City  Yi°  heat.  Therefore,  the  buyer  has  become  more  or  less 
Difficult  calloused  to  the  appeal,  and  is  much  less  responsive 
than  his  small  town  brother.  The  city  buyer  shops  be- 
fore purchasing.  This  shopping  may  cover  weeks  before  final 
action  is  taken.  I  know  of  one  woman  who  visited  six  stores 
to  examine  and  compare  dress-goods  values,  and,  finally,  after 
two  weeks'  deliberation  over  the  samples  collected,  returned 
to  the  first  establishment  and  bought. 

The  department  stores  are  mainly  responsible  for  the  high 
tension  in  buying  in  the  cities.  Few  of  the  big  department 
stores  spend  less  than  $100,000  yearly  in  newspaper  adver- 
tising alone,  and  many  spend  that  amount  in  a  single  paper. 
The  tremendous  force  of  daily  pages  and  frequent  double  pages 
of  department  store  newspaper  advertising  has  reduced  the 
effect  upon  the  consumer  of  the  manufacturer's  advertising 
campaign  very  materially. 

By  eliminating  the  trade-marked  name  in  their  selling,  the 
department  stores  have  driven  in  a  separating  wedge  that  has 
made  them  independent  of  the  manufacturer.  Three  women 
were  given  a  list  of  twenty  advertised  articles  to  purchase  at  a 
department  store  in  Chicago.  Of  that  number  they  returned 
with  only  three;  in  place  of  the  other  seventeen  they  were  all 
offered  "our  brand  which  we  ourselves  manufacture." 

The  buyer  in  the  small  town  is  thrown  into  an  intimate 

contact  with  the  store  and  its  proprietor  which  is  absent  in 

our  cities.      The  more  or  less  uninterested  clerks  of 

The  Buyer  ^^le  big  stores  are  a  barrier  to  anything  but  a  similarly 

Small      mechanical  selling  and  buying  method.     This  elimi- 

Town  nates  emotion  from  buying  and  makes  it  a  cold 
reasoning  process,  and,  consequently,  a  harder  and 
longer  process. 

To  stimulate  selling  in  cities  by  means  of  inquiries  from 
consumers  in  the  manufacturer's  national  campaign  is  a  farce. 
Inquiries  and  coupons  presented  to  clerks  in  larger  stores  are 
usually  met  with  a  cold  negative  and  seldom  if  ever  reach  the 
buying  head  of  a  department.  As  an  experiment,  I  made 
twelve  inquiries  at  one  department  store  in  accordance  with 
the  suggestions  in  twelve  manufacturers'  advertisements.  I 
was  told  at  each  counter,  "We  don't  carry  it,  but  we  have  our 


44  ADVERTISING  AS  A  BUSINESS  FORCE 

own  special  brand."  Eight  of  these  special  brands  were  traced 
down  and  found  to  be  the  manufacturers'  goods  that  had  been 
advertised 

The  excerpts  presented  in  this  chapter  have  been  chosen 
with  a  view  to  making  clear  four  points  which  are  to  be 
elaborated  in  subsequent  discussions: 

(1)  Distribution  of  goods  for  retail  sale  is  in  chaos,  due  to 
the  interference  with  one  another  of  the  various  steps  in  the 
old  or  "regular"  distribution  system. 

(2)  Much  of  this  confusion  has  grown  immediately  out  of 
attempts  to  control  trade  tlirough  appeals  to  the  consumer. 
The  man  who  can  control  the  consumer-demand  is  always  in 
the  strategic  position. 

(3)  Of  all  the  distribution  factors,  the  retailer  is  most 
favored  by  natural  conditions,  since  he  is  the  channel 
through  whom  the  consumer-demand  once  created  is  con- 
verted into  business. 

(4)  While  the  retailer  has  the  best  natural  position,  the 
other  factors  in  the  distribution  system,  the  producer  and  the 
middleman,  are  by  no  means  weaponless,  nor  are  they  think- 
ing of  surrender. 


REVIEW   QUESTIONS  —  CHAPTER   II 

1.  What  are  the  two  main  steps  in  the  distribution  of  goods 
for  retail  consumption.'^ 

2.  Why  is  there  trouble  in  the  system? 

3.  What  are  the  troubles  of  (a)  The  Manufacturer?     (b) 
The  Jobber?     (c)     The  Retailer? 

4.  How  does  this  conflict  in  the  distribution  system  affect 
national  advertising? 

5.  How  does  national  advertising  influence  stock  selection 
by  the  retail  grocer? 

6.  If  the  retailer  has  an  advantage  in  his  ability  to  "sub- 


THE  DISTRIBUTION  SYSTEM  45 

stitute,"  why  does  he  allow  himself  to  be  driven  to  handle  so 
many  lines? 

PROBLEM   QUESTIONS  —  CHAPTER   II 

1.  How  do  you  account  for  the  rise  of  the  "big"  store  in  the 
dry  goods  and  ladies  ready-to-wear  trades? 

2.  Are  the  same  causes  back  of  the  chain-store  development  in 
groceries  and  drugs? 

3.  Taking  into  account  all  the  efforts  being  made  to  educate 
consumers,  and  influence  jobbers  and  retailers,  and  the  growth 
of  trade-mark  and  brand  advertising  and  price  maintenance, 
would  you  say  that  conditions  were  better  or  worse  for  big 
store  and  chain  store  development  to-day  than  they  were 
twenty  years  ago?     Give  reasons  in  full. 

4.  What  do  you  think  of  the  future  of  the  small  dealer  in 
the  drygoods,  grocery  and  drug  lines? 

5.  To  what  extent  are  conditions  the  same  in  the  hardware 
business  as  in  these  other  trades?  What  would  you  think  of 
a  chain  of  hardware  stores  as  a  business  proposition  as  compared 
with  a  chain  of  grocery  or  drug  stores? 

6.  Would  you  say  that  a  manufacturer's  national  campaign, 
advertising  sheetings  to  the  consumer,  would  be  easier,  or  more 
likely  to  give  results  than  under  present  conditions  if  the  retail 
dealers  handling  the  goods  were  all  small  as  they  were  thirty 
years  ago?  If  there  were  no  small  dealers  left  what  would  be 
the  case? 

7.  If  you  were  planning  an  advertising  campaign  for  a  scour- 
ing compvound  for  enamel  tubs,  basins,  etc.,  to  be  sold  both  by 
grocers  and  hardware  stores,  which  outlet  would  you  give  most 
weight  in  your  plans?  Would  you  expect  the  same  plan  to 
cover  them  both? 

8.  Mr.  Gage  in  discussing  the  disorganization  of  the  dis- 
tribution system  says  in  one  place  that  the  manufacturer  is 
"the  strongest  factor  in  the  fight,"  In  another  place  he  says: 
"The   consumer   holds   the   key."     Mr.    Louis   says:     "The 


46  ADVERTISING  AS  A  BUSINESS  FORCE 

retailer  is  the  court  of  last  resort,  and  the  retailer  knows  his 
power."  Mr.  Cherry,  on  the  other  hand,  seems  to  think  that 
the  retailer  (in  the  grocery  trade,  at  least)  is  obliged  by  modern 
conditions  of  trade  to  do  a  complicated  business  at  small 
profits,  and  that  in  this  he  is  more  or  less  helpless.  Are  these 
men  all  talking  about  the  same  conditions?  Is  there  any  way 
to  reconcile  their  statements? 


CHAPTER  ni 

THE    RELATION  OF    ADVERTISING    TO    THE    DISTRI- 
BUTION   SYSTEM 

WITH    this   brief   discussion   of  commercial  analysis 
applied  to  advertising  problems,  and  this  summary 
of  some  features  of  the  disturbed  state  of  the  retail 
distribution  system,  we  face  two  specific  questions: 

(1)  How  can  the  advertiser  who  must  sell  through  this  dis- 
ordered system  determine  what  he  wants  to  do  to  his  market? 
and 

(2)  Having  chosen  his  desired  ends,  how  is  he  to  set  about 
attaining  them? 

In  April,  1912,  Clarkson  A.  Collins,  Jr.,  Manager  of  the  Plan 
and  Copy  Department  of  the  Collin  Armstrong  Advertising 
Company,  of  New  York,  contributed  a  series  of  articles  to 
Printers'  Ink  under  the  title  "What  To  Do  Before  Advertising." 
In  the  first  of  these  Mr.  Collins  says: 

.  .  .  *A  salesman  can  sell  goods  at  a  profit  in  spite  of  a 
faulty  sales  plan,  a  cheap  package,  a  poor  letter-head;  in  spite  of 
a  hundred  different  errors,  any  one  of  which  might  well  spell 
death  to  the  success  of  an  advertising  campaign. 

There  is  no  waste  in  a  salesman's  work.     He  goes  always 
to  a  possible    buyer.     Out  of  a  thousand  reproductions  of 
an  advertisement  only  one  may    reach    a  possible 
Waste     buyer.     And  when  the  possible  buyer  is  reached  the 
Alotion  m  gpoken    word    is    always    more    effective    than    the 
ing       written.     The  spoken  word  meets  an  objection  in- 
stantly.    The  written  word  may  never  meet  it.     The 
spoken  word  is  reinforced  by  a  smile,  a  gesture,  the  clasp  of 
a  hand.     The  written  word  has  nothing  but  itself. 
*Printers  Ink,  April  4,  1912.  p.  3. 

47 


48         ADVERTISING  AS  A  BUSINESS  FORCE 

Since  advertising  in  any  form  does  entail  this  tremendous 
waste,  the  manufacturer  who  intends  to  advertise  should  put 
his  house  thoroughly  in  order  before  spending  a  dollar  on  the 
written  word.  Only  by  so  doing  can  he  hope  to  receive  the 
greatest  results  possible  from  his  advertising. 

The  average  manufacturer  is  more  of  a  maker  than  a  seller. 
As  a  result  there  is  usually  much  to  be  put  in  order  in  the  sales 
side  of  his  house,  the  side  that  deals  with  human  nature,  not 
with  machines  and  materials. 

And  it  is  with  the  sales  side  that  I  shall  treat,  taking  for 
granted  that  the  manufacturing  side  is  in  order,  that  the  manu- 
facturer is  turning  out  at  the  lowest  possible  cost  an  article 
which  performs  in  the  best  possible  way  the  purpose  for  which 
it  is  made. 

The  manufacturer  who  would  advertise  must  consider  care- 
fully the  following  factors,  making  changes  and  corrections 
when  necessary  and  possible,  in  order  to  do  away  with  every 
ounce  of  friction  that  is  going  to  retard  or  perhaps  wholly  de- 
stroy the  success  of  his  campaign: 

I.     The  Article.     Is    its  appearance  attractive    otherwise? 

Seven        ^^'     '^^^    Name,     Is    it    easy   to    remember   and 
Things  for  pronounce?     Can  it  be  protected? 
the  Adver-     III.     The  Package.     Is  it  attractive  in  appearance? 
User  to   Is  it  convenient  in  shape  and  size?     Does  it  lend  itself 

onsi  er  ^^[1  to  display  on  the  dealers'  shelves? 

IV.  Prices.     Are  the  profits  to  the  trade  too  high  or  too  low? 

V.  Distribution.  Is  it  concentrated  or  scattered?  Will  it 
dovetail  with  an  efficient  advertising  campaign  of  any  kind? 

VI.  Distinctive  selling  points.  Are  there  any?  Can  they 
be  created? 

VII.  Business  Stationery.     Is  it  attractive  and  distinctive? 
I  have  seen  most  of  the  principles  implied  by  the  above 

questions  violated  without  apparent  material  harm  by  success- 
ful manufacturers  —  non-advertisers.  I  have  also  seen  the 
non-adherence  to  any  one  of  these  same  principles  constitute  in 
itself  the  rock  upon  which  an  advertising  campaign,  otherwise 
successful,  has  been  wrecked,  or  at  least  had  its  power  greatly 
impaired.     .     .     . 

The  appearance  of  an  article  has  about  as  much  effect 
upon  sales  made  by  the  spoken  word  as  upon  those  made  by 
the  written  word.  If  it  is  well  designed  and  looks  efficient, 
it  will  sell  better  than  a  competing  article  that  has  not  these 


RELATION  OF  ADVERTISING  49 

attributes.     Logically,  however,  this  is  a  point   on   which   a 

manufacturer  should   reach   perfection  before  selling  work  of 

any  kind  is  attempted.     There  is  absolutely  no  excuse 

I.    TJie    fQj.  the  short-sightedness  or  ignorance  on  the  part  of 

^■f  A  -  i^ia^'^y  manufacturers  which  makes   it  necessary  for 

pea  ranee   ^^^  advertising  manager  or  agent,  coming   into  the 

game  after  it  is  started  to  change  the  appearance  of 

an  article  he  is  to  advertise. 

The  mistakes  made  in  christening  articles  of  merchandise 

are   innumerable.      It  would  seem  that    most  manufacturers, 

in  selecting  a  name  for  some  child  of  their  brain, 

Rff  fj°"''^  open  a  dictionary,  a  Bible,  or  any  other  book  that 

N^an^ie^"^  comes  handy  and  pounce  upon  the  first  word  that 

Selection  catches  their  eye.     When  this  is  not  the  process  the 

names    of    competing    articles    are   gone    over    and 

another  name  as  nearly  like  the  rest  as  possible  is  originated. 

Among  sweeping  compounds,  the  manufacture  of  which  is 
a  comparatively  new  industry,  are  to  be  found  the  following 
names : 

Nodust 
Nomordust 
Dustbain 
Death-to-Dust 
Dustroy 
Kildust 
The  packages  for  these  different  sweeping  compounds,  al- 
though alike  in  general  shape,  differ  in  color. 

Let  a  woman  be  sampled  with  one  of  these  compounds,  let 
her  grocer  make  a  sale  over  the  counter,  and  the  chances  are 
that  thereafter  she  will  be  able  to  distinguish  her  particular 
compound  by  the  color  of  its  package.  Her  dealer  will  not  be 
able  to  give  her  a  substitute.  If  her  first  impulse  to  buy  comes 
through  one  of  these  methods,  and  it  probably  will,  if  the  article 
is  not  advertised,  the  similarity  of  names  will  not  hurt  the 
manufacturer  greatly. 

But  two  or  three  of  the  makers  of  these  compounds  are  now 
beginning  to  advertise.  Let  a  woman  be  convinced  by  the  more 
or  less  careless  reading  of  advertisements  of  Nodust,  let  us  say, 
that  she  wants  to  try  a  package.  She  has  no  distinct  idea  of 
what  the  package  looks  like.  How  easy  for  the  grocer  who  does 
not  carry  Nodust  to  sell  her  Nomordust  instead,  or  Dustbain 
instead  of  Dustroy,  Kildust  instead  of  Death-to-Dust. 


50  ADVERTISING  AS  A  BUSINESS  FORCE 

The  familiar  slogan,  "  Buy  by  name,"  is  reduced  to  a  mockery 
in  a  case  like  this.  If  any  one  of  those  six  manufacturers  had 
used  a  little  thought  and  foresight  in  selecting  a  name  for  his 
article,  he  would  have  had  an  inestimable  advantage  over  his 
competitors  when  it  came  to  selling  through  the  written  word. 

A  short  time  ago  a  large  corporation  was  about  to  put  a  new 
article  on  the  market.     The  sales  plan  was  ready.     An  exten- 
sive advertising  campaign  had  been  planned. 
TheVdue       ^  number  of  the  lines  produced  by  the  company 
tablished    were  sold  under  an  inclusive  trade  name.    In  the  case 

Name      of  this  particular  article   one  of  the  officers  decided 

that   variety   in   names   is   as  spicy   as   in  life.     He 

selected  a  name  totally  unlike  the  trade  name  of  the  company, 

which  was  already  widely  and  favorably  known.    The  executive 

committee  approved  his  selection. 

Fortunately  the  advertising  manager  of  the  corporation 
knew  his  business,  and  furthermore  had  backbone  enough  to 
object  strenuously  to  a  thing  he  knew  was  wrong.  The  adver- 
tising agent  backed  him  up  and  finally  the  name  adopted  was 
discarded  and  the  regular  trade  name  used  in  its  place.  A  brand 
was  snatched  from  the  burning.  The  sale  of  that  article  through 
its  advertising  had  been  greatly  augmented  by  means  of  the 
good-will  already  enjoyed  by  its  unadvertised  brothers. 

So,  Mr.  Manufacturer,  use  foresight  rather  than  hindsight 

Good  in  matters  pertaining  to  your  label  or  trade  name. 
Names  to    Don't  select  a  name  such  as  Star,  O.  K.,  Twentieth 

Avoid  Century,  Standard,  Ohio.  There  are  180  Standards 
of  one  kind  and  another  on  the  market  to-day.  There  are  44 
Twentieth  Centurys,  over  50  O.  K's,  41  Ohios,  almost  200 
Stars.  The  name  Ohio  is  descriptive  in  a  geographical  sense. 
It  cannot  be  protected.  The  other  names  have  lost  value  on 
account  of  their  commonness 

Beware  of  the  association  of  ideas  on  the  part  of  the  public. 
Such  names  as  Standard,  Peerless,  Perfect,  Perfection,  suggest 
alike  the  idea  good  or  best.  The  identity  of  the  name  is  apt  to 
be  lost  in  the  idea  it  suggests.  Get  a  name  that  is  distinctive, 
short,  easy  to  spell,  easily  remembered,  and  print  it  so  that  it 
can  be  read.  Then  drive  home  in  your  copy  the  idea  that  the 
article  it  represents  is  the  best. 

What  I  have  already  said  with  regard  to  the  appearance  of  an 
article  applies  largely  to  the  package  in  which  it  is  sold. 
This  is  especially  true  when  the  nature  of  the  article  makes  a 


RELATION  OF  ADVERTISING  51 

container  absolutely   necessary,    as    is    the    case    witli  most 

articles  of  food,  with  liquids,  powders,  cold  creams,  etc.     Here 

the  package  takes  on  the  nature  of  the  article  itself, 

///.    Ad'   and  it  should  not  only  be  attractive  in  appearance, 

vcrtismg    j-^^^  should  lend  itself  readily  to  the  purpose  it  is  to 
Aspects  of  ,  .  ''  X-      X- 

the        serve  when  m  use. 

Package        A  polishing  cloth  for  metals  designed  to  take  the 

place  of  the  familiar  liquid  and  rag  combination  was 

on  what  appeared  to  be  its  deathbed.     Although  the  ills  which 

beset  it  were  numerous,  not  the  least  among  them  was  the  form 

of  its  container. 

The  cloth  is  moist  and  should  have  been  sold  in  a  package 
that  would  serve  as  a  repository  for  it  when  it  was  not  in  use. 
Instead,  the  manufacturers  packed  it,  tightly  rolled,  in  a  small 
cylindrical  carton.  When  the  cloth  had  been  taken  from  the 
carton  and  wrinkled  in  use  it  could  not  easily  be  replaced. 
A  special  place  in  which  to  keep  it  had  to  be  found.  As  a  result, 
the  fact  of  its  moisture,  an  unpleasant  feature  at  the  best,  was 
accentuated,  and  repeat  orders  from  the  consumer  were  not 
forthcoming. 

Every  manufacturer  of  package-sold  goods  should  accompany 

his  package  into  the  home  of  the  consumer,  study  its 

Study  the    aclvantages  and  disadvantages  as  they  show  them- 

Product     selves  there.      Then  he  is  in  a   position  to  make 

Service      intelligently  the  changes  that  suggest  themselves  as 

Conditions  necessary.      This  step,  however,  shovdd  be  taken  at 

the  beginning  of  the  sales  campaign,  not  put  off  until  a  certain 

amount  of  good-will  has  been  created  for  the  package  in   its 

original  form. 

*If  the  trade  discounts  on  an  article  are  too  low,  or  if  the 
price  to  the  consumer   is  too  high,  the  fact  will  be 
IV.     The   discovered  at  the  beginning  of  a  sales  campaign  usually 
Price  in     long  before  any  advertising  is  indulged  in. 
,■■  ^^^'       When  the  trade  is  being  allowed  too  large  a  profit. 
Relations    however,  it  may  take  an  advertising  campaign  to 
bring  to  light  the  evil  that  is  resulting. 
An  unreasonably  high  trade  discount  is,  if  not  an  invitation, 
at  least  a  temptation  to  the  dealer  to  cut  prices. 

There  is  an  article  being  sold  through  the  hardware  trade  on 
which,  up  to  a  short  time  ago,  a  profit  of  90   per  cent,  was 


Printers   Ink,  April  11,  1912,  p.  67. 


52  ADVERTISING  AS  A  BUSINESS  FORCE 

allowed.  The  manufacturer  sought  to  curry  favor  by  allowing 
this  profit.  His  competitors  only  give  from  40  to  50  per  cent, 
and  the  trade  had  always  been  well  satisfied  with  the  prices. 

The  90  per  cent,  man  began  to  advertise.  Trouble 
followed  immediately.  The  price  of  his  commodity  was  a 
feature  that  should  have  been,  and  was,  given  prominence  in 
his  advertising.  This  very  prominence  showed  at  once  that  his 
commodity  had  no  stable  price.  It  brought  to  a  head  a  sore 
that  had  been  festering  for  some  time. 

The  article  was  supposed  to  retail  at  one  dollar.  The  trade 
had  been  selling  it  at  from  sixty-five  cents  to  ninety-five  cents. 
In  few  instances  had  the  full  price  been  asked. 

When  the  advertising  created  a  demand  for  the  article  at  a 
given  price  the  inevitable  happened.  The  consumer  found  that 
he  could  buy  at  less  than  he  expected.  Shopping  for  the  lowest 
price  followed.  Confusion  and  dissatisfaction  among  the  trade 
resulted. 

From  the  above  example,  and  I  know  of  at  least  one  other 
similar  case,  it  will  be  seen  that  too  great  liberality  is  as  inju- 
rious in  sales  work  as  penuriousness.  Also  it  takes  the  written 
word  to  show  the  fault  clearly. 

If   a   manufacturer,   while   his   business   is   in   its    infancy, 

V    The     ^^^^  ^^^y  ^^^^    ahead  and    plan    for    bigger,   better 

Advertis-    days,  he  will  save  himself  untold  worries,  bring  untold 

ingSide  of  dollars  into  his  pocket.      This  applies  as  truthfully  to 

Distribu-    \^q   question    of    distribution    and    to    distributing 

*^"       methods  as  to  any  other  department  of  business. 

The  citation  of  two  specific  instances  will  be  sufiicient  to  show 
the  all-important  relation  between  the  distribution  of  a  com- 
modity and  the  advertising  of  that  commodity. 

Two  years  ago  I  listened  to  the  tale  of  w^oe  of  a  textile  manu- 
facturer. His  first  advertising  campaign,  which  had  involved 
an  expenditure  of  $15,000  in  women's  publications  and  trade 
papers  during  a  period  of  eight  months,  had  ended  dis- 
astrously. Results  were  nil.  The  money  had  apparently 
been  wasted. 

I  looked  at  the  copy  that  had  been  run.  It  was  attractive, 
convincing.  I  examined  the  fist  of  mediums  used.  So  far  as 
class  went  it  was  all  right.  I  asked  the  manufacturer  about 
his  distribution.  It  was  nation  wide.  The  number  of  towns 
in  which  his  goods  were  sold?  About  a  thousand.  The  number 
of  dealers  handling  his  line?     About  a  thousand. 


RELATION  OF  ADVERTISING  53 

There  was  the  solution.  A  national  campaign  to  the  con- 
sumer with  a  thousand  dealers,  scattered  from  the  Atlantic 
to  the  Pacific,  handling  his  goods!  The  waste  was  enormous. 
No  wonder  that  the  campaign  had  failed. 

He  had  about  25,000  possible  customers  among  the  retail 
trade.  Fifteen  thousand  of  them  were  located  in  the  towns 
in  which  he  had  distribution.  A  woman  who  read  his  advertis- 
ing and  was  influenced  thereby  had,  on  a  national  basis,  but 
one  chance  in  twenty-five  of  finding  his  goods  on  sale  in  her 
store.  Limiting  the  hazard  to  his  cities  alone,  she  had  one 
chance  in  fifteen. 

This  man  had  agreed  to  sell  to  only  one  dealer  in  a  town.  His 
customers  were  not  limited,  however,  as  to  the  selling  of  com- 
peting goods.  He  gave  everything,  received  nothing.  Under 
his  plan  his  total  market  consisted  of  1,200  retail  dealers,  there 
being  that  many  towns  in  the  United  States  in  which  his  goods 
could  be  sold. 

Advertising  of  almost  any  kind  was  for  him  impossible.  A 
magazine  campaign  was  out  of  the  question  under  his  plan  of 
distribution.  A  newspaper  campaign,  supposing  that  he  spent 
only  $100  per  town,  would  total  $100,000.  He  had  so  limited 
his  sales  that  an  expenditure  of  even  half  that  amount  would 
have  been  impossible.  In  fact,  so  far  as  advertising  went  there 
was  only  one  thing  he  could  do  —  get  into  the  advertising 
columns  of  his  customers. 

A  few  weeks  ago  there  walked  into  my  office  a  man  who  had 

made  up  his  mind  that  he  would  advertise  the  article  he  made  — 

an  article  of  general  household  use  selling  through  hard- 

Behveen    ^^^^■>  house  furnishing,  and  department  stores.     He 

Advertis-   was  firmly  convinced  that  advertising  would  pay  him. 

ing  Cost    From  what  he  told  me  I  judged  that  it  would  —  but 

and  Dis-   ^ot  with  his  present  distribution.    He  has  three  sales- 

Exvense    ™^^  °^  ^^^  road.        One  covers  the  Pacific  Coast  — 

because  when  hired,  he  said  that  he  was  most  familiar 

with  the  trade  there.     One  works  in  New  York  City.     The 

third  is  busy  in  New  England  —  busy  there,  it  seems,  because 

he  was  familiar  with  that  territory. 

I  convinced  the  man  who  committed  the  above  crime  against 
good  sense  in  selling  that  he  cannot  advertise.  It  would  take 
between  $30,000  and  $40,000  a  year  to  cover  his  territory 
adequately  with  newspapers.  Under  present  conditions  sales 
do  not  warrant  such  an  expenditure.     Magazines  could  not  be 


54  ADVERTISING  AS  A  BUSINESS  FORCE 

used.  His  distribution  was  too  scattered.  So,  this  man,  who 
wants  to  advertise  and  should  advertise,  has,  through  lack  of 
sales  knowledge,  effectually  closed  the  advertising  door  against 
himself.     It  must  remain  closed  for  some  time  to  come. 

The  moral  of  all  this  is  plain :  Concentrate  your  sales  efforts. 
Select  as  a  centre  the  most  promising  field  for  your  product. 
Then  work  out  from  that  centre. 

The  advantages  that  accrue  do  not  all  relate  to  advertising. 
This  method  of  conducting  a  sales  campaign  has  many  general 
features  that  make  it  advisable  in  most  cases  and  that  are  too 
obvious  to  need  mention. 

Advertising  whets  the  edge  of  competition.  With  one  excep- 
tion it  is  the  most  direct  form  of  competition.  The  manufacturer 

yj  who  becomes  an  advertiser  enters,  in  effect,  into  a 
Picking  great  debate.  His  opponents  are  his  competitive  ad- 
Out  the  vertisers.  His  audience  and  his  judges  are  the  people. 
Selling    jjg  ^^r[\\  -y^rin  or  lose  primarily  on  the  strength  and 

'^^^  *  clarity  of  his  argument,  not  on  the  virtues  of  his 
proposition.  To  win  decisively  he  must  not  only  present  con- 
clusions, but  also  the  facts  from  which  these  conclusions  are 
drawn.  He  must  deliver  a  stronger,  a  more  convincing  argu- 
ment than  his  opponents. 

Few  advertisers,  particularly  new  ones,  realize  the  value  of 
the  use  of  logic  in  their  copy.  Sweeping,  unsupported  state- 
ments are  the  rule ;  careful,  deductive  reasoning  the  exception. 

This  all  leads  inevitably  to  the  question  of  individuality  in 
copy,  the  necessity  of  giving  the  consumer  some  distinct,  indi- 
vidual reason  for  believing  that  one  article  is  better  than  another. 

In  planning  an  advertising  campaign  for  a  manufacturer  with 
whose  proposition  I  was  totally  unfamiliar  at  the  beginning,  I 
came  eventually  to  the  consideration  of  copy.  The  general 
sales  plan,  the  matter  of  his  relations  with  his  trade,  the  items 
of  cost  and  profit,  manufacturing  methods,  etc.,  had  all  been 
gone  over.     Everything  was  as  it  should  be. 

My  manufacturer  did  not  have  much  to  say  about  his  copy. 
On  my  asking  him  what  he  considered  his  strongest  selling  points 
with  the  consumer  he  produced  a  collection  of  forty  or  fifty 
advertisments  that  had  been  run  during  the  two  previous  years. 

"Here,"  he  said,  "this  copy  gives  the  whole  story.  You'll 
probably  get  more  out  of  it  than  I  could  tell  you.'' 

I  read  his  copy  from  the  beginning  to  end.  I  read  the  copy 
of  his  three  chief  competitors.     When  I  got  through  I  knew  no 


RELATION  OF  ADVERTISING  55 

more  than  I  did  at  the  beginning.  Every  one  of  the  hundred- 
odd  advertisements  I  read  told  me  the  same  thing.  Each  told 
what  the  article  mentioned  could  be  used  for.  (All  four  served 
the  same  purpose.)  Each  either  directly  claimed  or  implied 
that  the  article  mentioned  was  the  best  to  be  had.  Nowhere 
was  there  an  original,  distinctive  selling  point. 

But  the  manufacturer  I  was  working  with  has  such  a  sales 
point  now.  It  is  based  on  one  small  process  of  manufacture. 
He  had  entirely  overlooked  its  importance.  But, 
What  Is  a  properly  featured,  it  has  doubled  the  efficiency  of  his 
Foint?  advertising  and  carried  him  far  ahead  of  his  com- 
petitors. I  will  venture  to  state  that  there  is  no 
commodity  on  the  market  that  has  not  some  salient  feature  in 
connection  with  it  that  can  be  turned  into  capital  as  a  sales 
point,  an  actual  reason  why  the  article  is  or  does  what  the  maker 
of  it  says  it  is  or  will  do. 

Sometimes  this  sales  point  has  to  be  created  — ■  a  slight  change 
in  manufacturing  method,  a  change  in  shape.  But  a  clue  to  it 
is  always  there. 

I  should  like  to  give  other  and  more  specific  examples  under 
this  heading,  but  to  do  so  would  mean,  frankly,  the  disclosure 
of  so-called  trade  secrets. 

To  prospective  advertisers  I  can  only  say  this:  the  man  who 
has  only  come  into  contact  with  his  jobbing  or  retail  trade 
steps  into  an  entirely  new  field  when  he  begins  to  advertise 
to  the  consumer.  The  sales  arguments  he  has  been  accustomed 
to  become  useless.  He  must  create  new  ones  to  meet  new  con- 
ditions. In  some  particular  the  thing  he  makes  is  different 
from  and  possibly  better  than  the  thing  his  competitor  makes. 
He  should  discover  the  particular.     .     .     . 

These  points  made  by  Mr.  Collins  show  some  of  the  ways  in 
which  the  sales  possibihties  of  the  goods,  and  the  sales  methods 
affect  the  advertising.  On  the  other  hand,  the  advertising  often 
has  a  very  distinct  effect  on  the  sales  possibilities  of  the 
goods,  and  upon  the  sales  methods  as  well.  The  relations 
between  advertising  and  seUing  are  of  the  nature  of  a  constant, 
mutual  interaction. 

Hamilton  Gibson,  Manager  of  the  Cereal  Department  of  the 
Ralston  Purina    Mills,  St.  Louis,  and    formerly    Advertising 


56  ADVERTISING  AS  A  BUSINESS  FORCE 

Manager  of  Sanitol,   treats  this  phase  of   the  subject  con- 
cretely, as  follows: 

DEVELOPING    THE   SALES   POSSIBILITIES   OF   AN   ARTICLE 

*The  great  modern  force  of  advertising  has  changed  mer- 
chandising conditions  completely  about,  so  that  the  merchant 
now  says,  "You  create  the  demand  and  then  I  will  stock  your 
goods.  For  to-day  so  powerful  is  advertising,  that  it  not  only 
takes  the  goods  off  the  dealers'  shelves,  but  puts  them  on  as 
well."  Therefore,  to-day  salesmen  follow  advertising  and  are 
the  result  of  it,  securing  the  advantages  of  distribution  through 
the  demand  that  advertising  has  created. 

Goods  sold  to  the  dealer  are  only  half  sold.  The  complete 
circle  is  the  sale  to  and  use  by  the  consumer. 

Do  not  let  me  lead  you  to  infer  that  there  is  no  further  need 
of  compact  and  strong  selling  organizations.  They  are  more 
needed  now  than  ever  before.  A  sales  manager  and  advertising 
manager  are  one  and  the  same  person  —  or  should  be.  Both 
are  arms  of  the  same  body,  two  component  forces  working 
toward  the  same  end,  sales.  Advertising  blazes  the  trail, 
creates  the  desire,  fixes  a  state  of  receptivity  in  the  mind  that 
finally  results  in  the  purchase.  The  sales  force,  taking  advan- 
tage of  this,  steps  in,  feeds  that  want  and  places  the  goods  so 
as  to  be  easy  of  access  among  the  wholesalers  and  retailers. 

Every  article  has  its  peculiar  sales  organization,  one  which 
experience  has  developed  as  best  fitted  to  distribute  that  par- 
ticular product.  The  wholesaler  is  the  grand  absorber 
Or  miiza-  ^^  thousands  and  tens  of  thousands  of  articles  in  his 
Hon  and  general  line  that  the  trade  demand  —  the  great  central 
the  Adver-  storehouse  for  supplying  an  instant  call.  The  jobber's 

Using  force  of  salesmen  have  beaten  tracks,  and  customers 
Campaign  ^^^  gohcited  regularly.  The  jobber  redistributes  and 
stocks  heavily  on  specialties,  which  are  fed  out  by  his  special 
staff  of  men.  The  shoe  houses  go  direct  to  the  merchant  with 
their  selling  organization,  if  they  are  big  enough;  if  not,  to  the 
jobber  or  broker.  The  broker  has  developed  for  himself  a  strong 
position.  He  is  known,  locally,  and  favorably  in  the  territory 
he  covers — sometimes  a  single  town,  sometimes  a  group  of  cities, 
or  a  limited  territory.  The  manufacturer  saves  his  selling 
expense  in  that  territory  by  dealing  with  the  broker;  often  sells 

*Printers  Ink,  March  23,  1911,  p.  54. 


RELATION  OF  ADVERTISING  57 

his  product  direct  to  the  broker,  who  redistributes  to  the  trades, 
including  tlie  jobbers,  through  his  own  men.  Many  articles  can 
be  more  economically  sold  through  brokers  than  by  maintain- 
ing a  force  of  salesmen. 

I  have  been  particularly  interested  in  watching  the  progress 

and  experiment  that  is  being  made  in  New  York  City  during 

.         the  past  two  years.    There  is  a  gentleman  who  owns  a 

Peculiar   cleaning  fluid  —  well-known  to  you  if  I  should  mention 

Case      it.  He  believes  so  strongly  in  the  theory  that  advertis- 

Which  is  ing  makes  its  own  demand  and  sells  its  own  goods,  both 


an 


„  .  to  the  consumer  and  to  the  retailer  and  jobber  — 
securing  its  own  distribution  and  without  the  oper- 
ation of  any  sales  force  —  that  he  is  spending  a  big  sum  of  money 
each  year  in  publicity,  using  all  kinds  of  mediums;  yet  does  not 
operate  a  single  salesman.  All  his  business  comes  to  him  by 
mail,  as  a  result  of  the  consumer  demand,  and  money  that 
would  be  spent  in  salesmen  is  thrown  entirely  into  advertising, 
and  his  little  office  force  carries  on  a  big  business  entirely  through 
correspondence.  It's  rather  an  ideal  way  to  operate  if  you  can; 
but  most  businesses  need  salesmen,  and  the  best  that  can  be  had. 
There  are  merchandising  problems,  however,  where  an  expensive 
sales  force  can  be  eliminated,  the  products  being  of  such  a 
nature  that  the  trade  can  be  carried  direct  from  the  factory  to 
the  wholesaler  and  retailer.  Many  hardware  products,  especially 
paints  and  certain  raw  materials,  are  instances  of  this  kind. 

The  retail  merchant  then  orders  as  needed  —  the  result  of  the 
local  demand  from  advertising.  In  that  way  the  dealer  stocks 
r  ,  J  no  more  than  his  local  consumption  warrants.  He  is 
vendence  never  out  of  the  goods.  He  is  constantly  getting  small 
of  Adver-  lots  from  the  jobber  The  jobber  stocks  it,  and  the 
Using  and  business  is  carried  through  in  the  most  economical 
Sales  Or-  j^anner.  Advertising  in  these  cases  will  then  have 
n  gj^^-j,gjy  absorbed  the  function  of  selling. 

But  the  manufacturer's  selling  force,  under  most  conditions, 
is  coming  to  consist  of  highly  specialized  men  covering  large 
territories,  seeing  only  the  biggest  trade,  and  keeping  things 
running  smoothly  in  their  respective  territories.  And  the 
salesman  is  becoming  more  and  more  a  through-and-through 
advertising  man. 

A  big  scouring-soap  concern  in  New  York  City  has  developed 
their  business  on  similar  lines,  so  that  to-day  their  goods,  through 
years  of  constant  publicity  advertising,  are  sold  in  over  250,000 


58  ADVERTISING  AS  A  BUSINESS  FORCE 

grocery  stores  in  the  country.  Their  business  is  constantly 
growing,  and  the  demand  has  gone  into  practically  every  nook 
and  corner  of  the  country.  This  concern  operates  a  group  of 
only  fifteen  salesmen,  who  do  not  pay  their  expenses  through 
the  orders  they  take,  but  are  kept  in  the  field  to  maintain  the 
company's  prestige,  to  keep  in  touch  with  the  trade  occasion- 
ally and  as  a  means  of  directing  local  sales  effort  whenever 
required. 

A  selling  organization  is  to-day  an  advertising  organization. 
Each  follows  the  advantages  provided  by  the  other. 

DEVELOPING   THE  ADVERTISABILITY  OF  AN  ARTICLE 

A  suggestive  discussion  of  how  the  advertisabihty  as  well  as 
the  salability  of  the  goods  advertised  as  affected  by  the  adver- 
tismg  is  found  in  the  following  article  by  W.  P.  Werheim, 
Advertising  Manager  of  Pratt  &  Lambert,  of  Buffalo,  N.  Y., 
makers  of  paints  and  varnishes: 

.  .  .  .  *I  shall  mention  specific  examples  rather  than 
endeavor  to  lay  down  any  general  principles,  as  every  com- 
modity has  its  own  peculiar  advertising  advantages. 

In  the  first  place,  the  manufacturer  must  determine  whether 

his  product  is  necessary,  desirable,  or  can  be  made  so.    Second, 

he    must  ask    himself  whether  his    product  is    new. 

What  an    different  from,  better  than,  or  at  least  as  good  as,  any 

Will  Show  similar  product.     Then,  if  he  is  convinced  that  his 

product  will  measure  up  to  these  two  requirements, 

he  may  proceed  farther. 

The  manufacturer  of  an  article  about  to  be  advertised  must 
be  prepared  to  make  good  on  his  advertising  in  other  words, 
the  article  must  be  as  good  as  his  advertising.  He  owes  this 
to  the  public  and  on  this  will  depend  his  final  success. 

Assuming  that  the  article  now  to  be  advertised  has  true  merit, 
the  next  step  is  to  offer  it  to  the  public  in  attractive  garb  or 
dress.  If  it  is  a  good  household  article  or  other  small  com- 
modity, he  must  look  carefully  to  the  package.  The  package 
should  be  of  convenient  size,  attractively  labeled  and  easy  to 
open.  As  examples,  there  are  the  packages  of  the  Uneeda 
Biscuit,  Colgate's  Toilet  Preparations,  and  some  competing 
preparations. 

*  Printers'  Ink,  January,  5,  1911  p.  27. 


RELATION  OF  ADVERTISING  59 

If  the  article  itself  has  no  exceptionally  prominent  qualities 
or  values,  a  scheme  frequently  can  be  evolved  to  make  an 
advertising  point  of  advantage.  As  an  instance  I  cite  the 
Colgate  Tooth  Cream.  Many  thousands  of  dollars  are  being 
spent  in  acquainting  the  public  with  the  fact  that  this  dentifrice 
"Lies  flat  on  the  brush  like  a  ribbon."  The  opening  of  the  tube 
is  so  constructed  that  the  cream  comes  forth  in  this  manner. 
Other  dentifrices  do  not  lie  flat  on  the  brush.  Thus,  the 
Colgate  people  have  really  given  this  article  a  quality  or  an 
advantage  which  the  product  itself  did  not  possess.  This 
demonstrates  how  an  advertising  asset  can  be  created.  In 
this  instance,  it  is  in  reality  service  —  service  to  the  customer; 
he  is  enabled  to  use  this  article  more  conveniently  and  more 
economically.  Many  tremendously  successful  campaigns  are 
based  on  just  such  simple  points. 

In  placing  an  article  on  the  market,  such  a  small  matter  may 
make  or  break  the  would-be  advertiser. 

The  advertisers  of  Towle's  Log  Cabin  Syrup  put  up  their 
syrup  in  miniature  tin  log  cabins.  They  say  in  their  advertise- 
ment: "It  is  put  up  in  the  log  cabin  can."  These  advertisers 
have  thus  linked  very  closely  the  style  of  package  with  the  name 
of  their  product. 

In  advertising  one  product  of  the  concern  with  which  I  am 
connected  —  I  refer  to  "61"  Floor  Varnish  —  we  fastened  upon 
one  point  which  could  be  featured;  that  point  was  durability. 
Heretofore,  in  the  advertisements  of  similar  products,  the  point 
of  durability  was  merely  mentioned  incidentally.  We  let  the 
other  fellow  tell  how  beautiful  floor  finishes  are  in  general  and 
how  easily  they  may  be  applied.  On  the  other  hand,  we 
endeavor,  in  our  advertisements,  to  drive  home  the  durability 
of  "61"  Floor  Varnish,  through  illustrations  of  our  hammer 
and  heel  test,  as  well  as  in  the  copy.  This  advertising  has  been 
exceptionally  successful,  whereas  a  campaign  on  a  similar 
product,  exploited  in  the  usual  manner,  was  a  flat  failure. 

An  advertiser  may  have  an  article  which  has  a  peculiar 
advertising  asset  in  some  territories  and  not  in  others.  For 
instance,  Huyler  sells  candies  "Fresh  Every  Hour."  This 
phrase  is  an  advertising  asset,  but  it  would  mean  absolutely 
nothing  and  would  sound  absurd  to  use  it  in  a  magazine  or  in 
the  many  towns  where  Huyler  sells  but  has  no  stores. 

Many  manufacturers  have  established  service  departments  — 
that  is,  they  have  established  departments  to  serve  customers. 


60  ADVERTISING  AS  A  BUSINESS  FORCE 

The  people  in  such  departments  devote  their  entire  time  and 

efforts  to  giving  the  customer  technical  information  as  to  how 

a  product  may  be  used  to  best  advantage,  that  its 

Advertis-  f^y  worth  may  be  developed  by  the  customer  himself. 
^Resultm  These  departments  are  featured  in  the  advertising. 

Finding    Thus  a  most  valuable  advertising  asset  is  created. 

or  De-         In  these  days  of  modern  advertising,  we  may  almost 

veloping  gg^  j|-  down  as  a  general  rule  that  the  ordinary  known 
Points  qualities  of  a  product  are  not  sufficient  to  make  it 
an  advertising  success.  The  qualities  must  be  en- 
larged upon,  developed  or  added  to  in  some  unique  manner 
to  secure  the  greatest  eflBciency  of  the  advertising.  I  do  not 
mean  by  this  that  it  pays  to  do  dishonest  advertising,  but  that 
the  advertiser  should  take  advantage  of  every  legitimate  means 
to  emphasize  the  qualities  of  his  product,  and  thus  actually 
add  value  to  it. 

In  short,  the  state  of  mind  of  the  purchasing  public,  or  the 
individuals  composing  it,  determines  the  "advertisability"  of 
a  product.  It  is  the  key  to  the  final  solution  of  the  sales 
problem.  Occasionally  a  desirable  state  of  mind  may  fortu- 
nately already  exist  and  the  only  requirement  is  the  mere  an- 
nouncement of  the  qualities  of  an  article,  but  usually  this 
desirable  state  of  mind  must  be  created  by  effective  illustrations 
and  forcible  copy. 

You  have  got  to  win  your  public  or  the  individuals  composing 
it.     This  done,  you  have  won  your  market. 

EFFECTS  OF  ADVERTISING  ON  UNADVERTISED  GOODS 

Thus  advertising  affects  the  selling  properties  of  the  goods 
advertised.  It  also  frequently  affects  lines  not  covered  by  the 
advertising  —  perhaps  quite  remote  from  it.  A  case  in  point 
is  brought  out  in  the  following  discussion: 

Vacuum  *"The  $250,000  or  $300,000  a  year  which  is  being 

Cleaner  spgjj^  jn  advertising  vacuum  cleaners  has  also  helped 

ing^Helps  "^  ^^  ^^^^  carpet  sweepers,  and  I  imagine  it  has  made 

the  Carpet  a  market  for  brooms,  too,"  says  G.  Q.  Porter,  the 

Sweeper  secretary  and  executive  officer  of  the  National  Carpet 

Trade  Sweeper  Company,  of  Newark,  N.  J.     "We  cannot 

tell  just  how  much  it  has  helped  us,  but  we  know  that  we 

*Printers'  Ink,  November,  16,  1911,  p.  52. 


RELATION  OF  ADVERTISING  61 

have  gained  about  50  per  cent,  in  business  over  last  year,  and 
must  attribute  some  of  the  increase  to  something  besides  our 
own  advertising  and  sales  effort. 

"The  peculiar  value  of  the  vacuum  cleaner  advertising," 
continues  Mr.  Porter,  "is  that  it  has  educated  the  people  to 
a  higher  standard  of  household  cleanliness  in  a  way  that  the  less 
striking  and  picturesque  methods  could  not  do.  It  has  probably 
educated  the  people  to  higher  ideals  of  household  cleanliness 
faster  than  it  has  been  able  to  educate  them  to  vacuum  cleaners, 
and  the  sweeper  and  broom  lines  have  profited  by  the  increased 
interest,  at  the  expense,  in  a  way,  of  the  vacuum  cleaner  people, 
though  the  outlay  will  all  come  back  to  the  latter  in  the  long  run. 

"Undoubtedly  a  large  number  of  housekeepers  have  grad- 
uated from  brooms  to  carpet  sweepers,  and  in  time  a  large 
number  of  carpet  sweepers  will  be  relieved  of  the  heaviest 
responsibility  in  housecleaning  by  the  addition  of  vacuum 
cleaners,  but  it  will  be  a  long,  long  time  before  the  vacuum 
cleaner  is  so  perfected  as  to  absolutely  displace  either  sweeper 
or  broom.  It  would  be  needless  and  bothersome,  for  instance, 
to  unship  the  cleaner  every  time  one  wished  to  pick  up  threads 
or  crumbs  on  the  floor  if  the  sweeper  or  broom  would  more  easily 
dispose  of  them.  Some  households  can  afford  only  a  broom, 
but  those  that  have  sweepers  have  brooms  also,  and  those  which 
employ  cleaners  have  the  others,  too." 

There  is  another  aspect  of  which  Mr.  Porter  did  not  speak. 

The  National  Company  is  comparatively  a  young  company.  It 

is  not  more  than  six  or  seven  years  old.       There  are 

hHel'  *^^^^^  carpet  sweepers  in  the  field  and  until  a  short 
EachOtker  time  ago  one  almost  monopolized  the  market.  The 
advertising  which  that  one  has  done  has,  of  course,  had 
large  share  in  softening  the  market  for  sweepers  and  to  a  lesser 
degree  for  brooms.  So  the  younger  concern  has  profited  not 
only  from  the  advertising  of  the  suction  sweeper  but  also  from 
the  more  direct  demand  created  by  the  older  concern.     .     .     . 

Inquiry  among  the  broom  manufacturing  houses  shows  that 
the  industry  has  probably  not  been  injured  by  the  vacuum 

jT^g       cleaner  and  carpet  sweeper  advertising.    It  has  grown 

Broom     as  the  population  has  grown.     If  it  were  advertised  it 

Business  is  possible  that  it  also  would  be  able  to  cash  in  more 

Also      heavily  yet  on  the  publicity  of  the  other  methods. 

rives    rpj^g  experience  of  these  lines  of  business  suggests  that 

it  might  be  profitable  to  give  more  thought  to  the  subject  of 


62  ADVERTISING  AS  A  BUSINESS  FORCE 

industry  advertising  than  is  generally  given.  The  biggest  men 
in  the  field  appreciate  that  what  is,  rather  loosely,  called  com- 
petitive advertising,  involves  a  great  deal  of  waste.  Advertising 
with  your  eye  on  your  competitor  distracts  attention  from  the 
educational  function  of  your  ad.  In  scheming  up  wordings, 
pictures  and  effects  to  offset  his  advertisements,  you  are  in 
danger  of  missing  the  customer's  eye.  Two  competitors  who 
are  doing  this  might  as  well  be  two  clerks  quarreling  behind 
a  counter  while  possible  customers  hesitate  and  pass  on. 

Few  fields  ever  do  reach  their  limit  —  for  those  who  attend 
strictly  to  business.  Beyond  the  developed  demand  there  is 
almost  always  an  immense  undeveloped  demand,  and  it  is 
generally,  we  could  almost  say  always,  cheaper  for  rivals  to 
combine  in  developing  this  latent  demand  than  to  struggle 
murderously  to  grab  off  the  lion's  share  of  the  limited  trade. 

THE  EFFECT  OF  ADVERTISING  ON  DEMAND  AND  DISTRIBUTION 

Commercially,  the  prime  effect  aimed  at  in  all  advertising 
is  some  form  of  influence  upon  demand.  To  create,  to  control, 
to  stimulate  demand  —  for  one  or  all  of  these  advertising  is 
done.  Wm.  H.  IngersoU,  who  is  advertising  director  of  the 
concern  making  the  widely  known  IngersoU  watches,  has  this 
to  say  about  the  interrelation  between  advertising,  the  demand, 
and  the  distribution  system: 

*Neither  distribution  nor  demand  can  precede  the  other 
without  loss,  without  wastefulness  and  therefore  without  loss 
of  efficiency.  If  we  are  going  to  wait  for  distribution  until  we 
have  created  a  demand,  we  will  wait  forever,  or  nearly  forever. 
On  the  other  hand,  if  we  are  going  to  create  a  demand  without 
distribution  —  rather,  if  we  are  going  to  try  to  create  a  demand 
without  distribution,  without  advertising  —  there  again  we  are 
going  to  delay  the  time  that  we  reach  the  success  to  which  we 
are  entitled.  In  other  words,  the  most  economical,  the  most 
efficient  way,  in  my  opinion,  of  handling  this  subject  of  distri- 
bution and  demand  is  to  go  ahead  in  a  moderate  way  and 
advertise,  and  take  the  sales  methods  that  are  at  hand  and  keep 
the  demand  going  by  getting  all  the  distribution  you  can. 

*Printers  Ink,  March  9,  1911,  p.  71 


RELATION  OF  ADVERTISING  63 

I  have  had  a  very  interesting  experience  in  the  convention  of 
our  own  salesmen.  During  this  convention  the  question  of 
what  is  demand  came  up.  We  found  it  possible  to 
Demand^  clarify  in  the  minds  of  our  salesmen  to  a  very  great  ex- 
tent what  they  are  to  say  on  this  question  of  demand. 
Some  of  them  had  thought  it  was  the  idea  to  threaten  the  dealer 
with  bankruptcy  if  he  didn't  have  our  goods,  because  of  the 
demand  that  was  being  created  by  our  advertising.  Some  of 
them  had  become  so  discouraged  that  they  never  talked  of 
demand,  and  they  plead  with  the  dealers  to  stock  the  goods  on 
some  personal  basis  to  save  their  jobs,  and  between  the  two  we 
found  that  the  real  solution  is  to  explain  to  the  dealer  what 
demand  is,  and  we  tell  them  it  is  this : 

Advertising  and  all  business  is  a  matter  of  the  mind;  all  that 
we  claim,  all  that  we  ask  our  salesmen  to  say  to  the  dealers  of 
this  country  is  that  our  advertising  itself  is  to  help 
Demand    them  create  the  possibility  for  sales,  to  teach  the  retailer 
tribution    ^^^^  ^^  ^^^  placing  in  the  minds  of  the  people,  his  cus- 
tomers, people  that  are  round  about  him,  certain  infor- 
mation that  predisposes  them  favorably  toward  the  thing  which 
we  are  advertising.  Now,  in  order  for  them  to  avail  themselves  of 
that  something  which  we  have  placed  in  the  minds  of  the  people, 
it  is  necessary  for  them  to  have  the  goods,  advisable  for  their 
own  sakes  to  sell  those  goods,  to  recommend  them,  to  say  what 
they  are,  and  to  realize  on  this  favorable  condition  that  we 
have  created.     Not  to  teach  them  but  to  tell  them  that  they 
must  have  those  things.     I  believe  that  these  salesmen  were 
greatly   strengthened  by  getting  that  into  their  minds.     Of 
course,  we  went  into  it  with  them  in  greater  detail.     It  helped 
them  to  understand  on  their  own  account  what  advertising  is, 
and  I  contribute  that  thought  here  for  the  sake  of  the  utility 
it  might  have  for   some    of   the   men   who   are   having    like 
problems. 

This  is  a  very  human  proposition;  all  of  business  is  a  human 
proposition.  The  dealer  can  very  materially  influence  the  sale 
of  any  line  of  goods  he  carries.  If  he  wants  to  sell  more,  he  can 
help,  or  if  he  wants  to  sell  less,  he  can  help.  What  are  the  means 
by  which  he  can  be  induced  in  the  matter  of  profit,  and  what 
are  those  things  which  are  more  or  less  fixed  in  business,  the 
adjuncts,  the  supplementary  methods  that  are  available  to  the 
sales  organization  for  giving  a  little  more  speed  to  the  sale  of 
goods  in  dealers'  stores .f*     One  desideratum  is  to  acquaint  the 


64  ADVERTISING  AS  A  BUSINESS  FORCE 

dealer  with  the  merits  of  the  goods,  and  with  the  kind  of  talk 
to  be  given  to  the  trade  in  support  of  your  advertising. 

I  have  sometimes  noted  with  surprise  the  effect  with  which 

,.  ,.        retailers  accept  and    utilize  information   along  that 

Uv"^ Goods  ^^^^-     If  yo^  ^^^  S^^^  them  selling  talk  on  your  goods, 

and        if  you  will  possess  the  clerks  of  those  dealers  with  the 

Demand     ideas  and  their  effective  expression  that  they  can  use 

ma  the      -^^  selling  the  goods  to  the  trade,  you  are  doing  a  good 

work  and  a  supplementary  work  to  your  advertising 

and  distribution. 

WEAK  LINKS    IN  THE    CAMPAIGNS 

These  discussions  of  the  relations  between  advertising  effort 
and  the  distribution  system  make  it  clear  that  while  there  are 
many  things  to  watch  in  advertising  as  a  business-creating 
force,  none  is  more  important  than  that  the  demand  once 
created  by  the  advertising  be  able  to  connect  easily  with  the 
goods. 

x\n  article  on  "Weak  Links  in  Big  Campaigns,"  by  Chal- 
mers Lowell  Pancoast,  presents  this  point  quite  vividly.  Mr. 
Pancoast  says: 

*A  few  weeks  ago  I  saw  a  "first-timer"  advertisement  in  a 
weekly  magazine.  The  article  advertised  was  something  I 
wished  to  purchase  very  much.  In  fact,  I  was  converted  into 
an  immediate  purchaser  from  the  first  reading. 

The  advertisement  was  attractively  illustrated,  presented 
convincing  arguments,  mentioned  a  six  months'  guarantee, 
named  colors,  sizes  and  prices.  Not  one  of  the  important  sell- 
ing points  was  omitted.  When  I  had  finished  reading  I  had 
fully  made  up  my  mind  to  purchase  one  of  these  articles. 

At  the  close  of  the  advertisement  appeared  that  old  familiar 
phrase,  "Ask  your  dealer."  Now  in  Chicago,  as  in  other  large 
cities,  with  such  indefinite  directions  the  prospective  purchaser 
simply  must  take  chances. 

I  went  to  four  stores  and  could  not  find  the  article  at  any 
of  them.  At  each  place  I  was  offered  "something  just  as 
good."     .     .     . 

*Advertising  and  Selling,  May,  1912,  p.  144. 


RELATION  OF  ADVERTISING  65 

The  chances  are  that  five  out  of  ten  people  would  have 
been  influenced  by  the  salesmen's  talk  and  immediately  for- 
gotten  the   advertised   article.      But    I   had    firmly 

Four      decided  I  wanted  this  particular  article,  which  had 
Chances    j^ggj^   described  so  convincingly.    When  I  could  not 

tuiion     fiiid  it  at  the  stores,  I  wrote  to  the  manufacturer,  and 

in  a  few  days  received  a  form  letter  which  did  not  give 

me  any  further  information.     I  was  just  about  to  write  to  the 

advertiser  and  jog  him  up  for  a  second  time  when  a  letter  came 

giving  the  names  of  two  dealers  in  Chicago. 

At  one  of  the  stores  mentioned  I  had  already  called,  but  I 
went  again  and  found  the  article  was  being  sold  without  any 
ticket  or  mark  to  show  it  was  the  article  advertised  in  the 
magazine  under  a  trade-marked  name. 

After  I   insisted  on  being   shown  that  it    really   was  the 
article  advertised  the  clerk  reluctantly  pulled  out  the  original 
box  from  beneath  the   counter  and  there  I  saw  the 
'^^ir^the^  trade-mark  name  on  the  box. 

Trade-  In    the    advertisement    the    phrase    "Guaranteed 

mark  and  for  Six  Months"  had  been  played  up  strongly.     The 
Guarantee  word  "guarantee"  had  been  mentioned  three  times. 

Lam-  rpj^^  guarantee  tickets  had  been  removed  from  the 
article,  and  when  I  asked  for  the  guarantee  ticket  the 
clerk  said  it  was  not  necessary  —  that  if  it  did  not  wear 
to  bring  it  back.  But  I  insisted  on  the  guarantee  ticket  and 
finally  it  was  dug  out  of  the  bottom  of  the  box,  where  it  had 
been  thrown  when  taken  from  the  cap  and  replaced  by  one 
of  the  store's  price  tickets. 

I  do  not  believe  there  is  one  person  in  twenty  who  would  have 
gone  to  the  trouble  I  did  to  purchase  this  article. 

My  experience  is  conclusive  proof  that  this  apparently 
excellently  constructed  national  campaign  has  several  costly 
"Weak  Links." 

In  the  first  place,  if  the  advertiser  had  used  a  couple  more 
inches  of  space  and  condensed  the  ending  of  the  ad,  he  could 
have  given  the  names  of  the  dealers  in  all  the  larger  cities  where 
this  article  might  be  found. 

In  order  to  get  results  from  the  greatest  number  of  large  city 
prospects  it  is  necessary  to  give  the  pame  of  the  dealer.  In  this 
advertisement  very  small  type  would  have  been  ample  to  direct 
the  customer.  The  lack  of  this  information  undoubtedly  lost 
the  advertiser  a  large  number  of  immediate  sales. 


66  ADVERTISING  AS  A  BUSINESS  FORCE 

In  this  case,  where  the  trade-marked  article  was  something 
new,  it  was  a  serious  weak  spot  in  the  campaign.  This  same 
"Weak  Link"  may  be  found  in  plenty  of  other  advertised 
products.  Sales  are  lost  because  the  advertiser  does  not  bring 
the  consumer  in  touch  with  the  dealer. 

Thousands  of  dollars  invested  in  good,  result-getting  adver- 
tising are  wasted  because  of  this  one  "Weak  Link." 

Another  weak  spot  in  the  campaign  just  mentioned  was  the 
fact  that  the  dealer  was  permitted  to  remove  the  guarantee  tag, 
and  place  the  articles  on  sale  with  no  mark  of  any  kind  to 
identify  them  with  the  trade-mark  on  which  thousands  of  dollars 
was  being  spent. 

Any  manufacturing  advertiser  who  used  the  larger  weeklies 
and  monthlies  certainly  should  make  his  campaign  to  dealers  as 
effective.  But  I  saw  this  same  product  displayed  in  a  dealer's 
window  without  anything  to  identify  it  as  the  trade-marked, 
advertised  product.  This  is  even  a  more  serious  weakness  in 
the  campaign  which  is  costing  the  advertiser  many  profitable 
sales  in  addition  to  the  money  invested  in  advertising  space. 

In  planning  the  campaign  every  link  in  the  chain  which  ex- 
tends along  the  trade  channel  should  be  tested  thoroughly  before 
the  chain  is  suspended  to  bear  the  weight  of  public  patronage. 

Here  was  from  all  appearances  a  very  well-exefcuted  national 
campaign,  yet  my  personal  experience  in  reading  the  advertise- 
ment and  attempting  to  buy  the  article  in  Chicago  proves  it  has 
many  "Weak  Links"  which  are  costly  leaks.     .     .     . 

REVIEW   QUESTIONS  —  CHAPTER   HI 

1.  What  seven  things  does  Mr.  Collins  mention  as  being 
necessary  for  the  advertiser  to  consider  in  trying  to  sell  goods? 

2.  Why  does  he  think  these  are  more  important  in  trying  to  in- 
terest customers  through  advertising  than  through  personal  sale? 

3.  Do  you  consider  the  case  of  the  cleaning  compound 
mentioned  by  Mr.  Gibson  an  exception  to  the  rule  he  states 
or  is  it  only  a  variation? 

4.  Referring  to  the  opinions  of  Mr.  Porter,  do  you  agree 
with  him  that  vacuum  cleaner  advertising  has  had  any  effect 
on  trade  in  carpet  sweepers  and  brooms?  Is  there  any  way  to 
prove  whether  it  has  or  not? 


RELATION  OF  ADVERTISING  67 

PROBLEM   QUESTIONS  —  CHAPTER   III 

1.  A  weak  link  in  many  national  clothing  campaigns  has 
often  been  pointed  out  in  the  failure  to  direct  the  prospective 
customer  to  the  nearest  local  representative.  Can  you  suggest 
any  practical  remedy  for  this?  What  would  you  think  of  the 
insertion  of  the  manufacturer's  name  or  card  in  local  directories 
and  telephone  books  of  some  of  the  large  cities,  giving  the 
street  address  or  'phone  number  of  the  representative  as  a  means 
to  this  end? 

2.  Could  you  suggest  ways  to  better  the  methods  used  by 
the  cap  manufacturer  (pp.  63-65)  to  co-ordinate  his  national 
and  local  advertising? 

3.  Give  concrete  examples  of  how  an  article  becomes  more 
salable  as  it  is  wxll  advertised.     Is  this  always  the  case? 

4.  What  do  you  think  of  the  suggestion  that  a  new  type  of 
"industry  advertising"  might  be  employed  to  offset  pioneering 
losses?     Is  the  idea  feasible? 


CHAPTER  IV 

THE   PROBLEMS   OF  MEDIUM  SELECTION 

WE  HAVE  examined  schemes  of  analysis,  have  looked 
into  the  advertising  aspects  of  goods,  of  market,  and 
of  distribution  methods  and  have  seen  the  need  of 
deciding  what  effect  is  to  be  striven  for.  Now  we  come  to 
the  question  of  what  mediums  will  produce  the  desired  effect 
^,     „  ,     with  the  greatest  certainty,  with  the  least  waste,  and 

Ihe   bales  ^  i  i  i 

Factors  in  the  least  expense.     Here  we  must  depend  partly  on 

Medium    our   advisers  in   the   field  of  advertising  technique. 
Selection      .      ,  ,  i  •     i 

And  yet  we  cannot  turn  the  case  over  to  them  entirely. 

Important  as  are  the  elements  of  technique  as  tools,  they  are 

after  all  only  the  means  to  the  end.     The  real  end  —  the  effect 

on  demand  —  is  largely  determined  by  the  character  of  the 

selling  problem.     If,  for  instance,  we  choose  one  market,  by 

class,  by  geographic  location,  by  income,  by  any  one  or  any 

combination  of  measurement  standards,  we  have  already  gone 

one  step  toward  medium  selection  —  and  that  a  long  step. 

Moreover,  one  does  not  need  to  be  a  prophet  to  see  a  very 
marked  advance  among  mediums  toward  a  policy  of  frankness 
and  honesty  in  their  statements  concerning  the  patrons  whom 
they  reach,  and  concerning  the  results  which  may  reasonably 
be  expected  to  follow  from  their  intelligent  use.  And  this 
increased  frankness  makes  it  easier  to  select  mediums  to  fit  a 
plan  worked  out  on  analysis. 

Medium  selection  is  a  business  by  itself,  calling  for  special 
training  and  much  detailed  knowledge.  In  most  cases  it  will 
be  found  wise  for  the  ordinary  advertiser  to  seek  and  follow  the 
advice  of  a  trained  and  conscientious  "  medium  selector  "  of 

68 


PROBLEMS  OF  MEDIUM  SELECTION  69 

some  kind.  And  yet  there  are  some  features  of  the  problems 
of  selecting  mediums  for  the  attainment  of  desired  advertising 
ends  which  can  and  should  be  familiar  to  every  advertiser.  An 
editorial  in  Printers'  Ink  for  May  4,  1911,  p.  78,  gives  the  fol- 
lowing estimate  of  advertising  outlay  in  the  United  States 
through  some  of  the  chief  mediums  in  general  use 

Newspaper  advertising  (retail  and  general) $250,000,000 

Direct  mail  advertising  (circulars,  form  letters,  etc.)     ....  100,000,000 

Magazine  advertising 60,000,000 

Farm  and  mail  order 75,000,000 

Novelty 30,000,000 

Billposting 30,X)00,000 

Outdoor  —  electric  signs,  etc 25,000,000 

Demonstration  and  sampling 18,000,000 

Street  car  advertising 10,000,000 

House,  organs,  etc 7,000,000 

Distributing 6,000,000 

Theatre  programmes,  curtain  and  miscellaneous 5,000,000 

$610,000,000 

Each  of  these  main  forms  of  advertising  has  its  ardent  ad- 
vocates.     And  the  ardor  with  which  they  advocate  their  pet 
plans  adds  to  the  advertiser's  difficulty  of  choice.      Fortmiately, 
nearly  every  one  of  these  methods  is  being  reduced  to  a  sound 
business  basis.     Greater  care  is  being  exercised  to  keep  up  the 
"tone"  of  the  advertising  carried,  and  greater  frankness  and 
honesty  are  being  employed  in  telling  the  advertiser  what  service 
he  is  getting  for  his  money.     The  advertiser's  ability  to  gauge 
his  mediums  to  his  needs  is  still  far  from  a  basis  of  mathematical 
certainty.      But  as  the  mediums  are  more  completely  stand- 
ardized the  advertiser  is  in  an  increasingly  better  position  to 
base  his  selection  of  mediums  on  the  results  of  his  analyses. 
Newspaper  advertising,  making  up    nearly    one  half  of  this 
Recent      estimated  total,  is  the  oldest,  and  probably  the  least 
Changes     skilfully  employed,  of  the  more  important  mediums. 
'paper  Ad-  A  large  part  of  the  trouble  with  newspaper  adver- 
vertising     tising  is  attributable   to  the  careless   methods  of  the 
publishers    in  accepting  almost  any  advertising   copy  which 
would  not  actually  exclude  the  paper  from  the  mails.     As  a 


70  ADVERTISING  AS  A  BUSINESS  FORCE 

result  many  general  advertisers  have  refused  to  use  daily 
papers  for  display  advertising. 

This  disregard  of  standards  of  respectability,  together  with  de- 
liberate misrepresentation  of  circulation  figures,  has  prevented 
the  newspapers  from  getting  their  full  share  of  the  advertising 
growth  of  the  past  decade  —  large  as  their  share  has  been. 

A  concerted  movement  has  been  made  during  the  past  few 
years  to  improve  the  quality  of  the  advertising  carried  in  daily 
papers,  in  order  to  make  this  form  of  publicity  more  attractive 
to  the  higher  types  of  national  advertisers.  Early  in  1910 
Printers'  Ink  wrote  a  letter  to  250  newspaper  publishers  in  the 
United  States  asking  them  what  measures  they  took  to  prevent 
the  appearance  of  fraudulent  or  improper  advertising. 

The  replies  to  some  of  these  letters  were  published  {Printers' 
Ink,  March  16,  1910,  p.  3)  and  indicated  a  very  widespread 
awakening  on  the  part  of  the  newspapers  to  a  sense  of  their  re- 
sponsibility for  the  honesty  of  their  advertising  columns.  Of  the 
papers  approached  thirty -five  refused  to  accept  private  disease 
advertisements  under  any  circumstances,  and  ten  others  accepted 
such  copy  with  privilege  of  revision.  Patent  medicines,  guess- 
ing contests,  intoxicating  liquors,  bucket  shops,  and  reward 
certificates  are  other  forms  of  advertising  tabooed  by  an  in- 
creasing number  of  papers.  On  the  whole,  the  moral  tone  of 
daily  paper  advertising  columns  is  being  raised,  and  this  medium, 
once  cleaned  up,  bids  fair  to  regain,  to  a  degree,  the  preemi- 
nence it  once  enjoyed.  And,  furthermore,  the  sentiment  is 
growing  in  favor  of  full  and  honest  circulation  statements  by 
newspapers.  As  this  practice  becomes  more  common  it  will  be 
increasingly  easy  for  the  advertiser  to  select  his  mediums  with 
regard  to  their  ability  to  produce  the  ends  he  has  chosen  to 
strive  for.  And  newspaper  advertising  will  come  into  its  own. 
Already  it  is  possible  for  an  advertiser  to  take  sworn  circulation 
figures  and  with  them  cover  a  good  many  of  the  best  markets  in 
the  country.  And  at  the  same  time  he  can  know  in  advance 
quite  definitely  what  his  outlay  for  space  is  to  be. 


PROBLEMS  OF  MEDIUM  SELECTION  71 

The  figures  covering  magazine  advertising  in  the  table  will 

be  considered   by   many   to  be  surprisingly   small    compared 

with   the  figures  above  it.     But  this  is  one  of   the 

iT?he  most  easy  to  estimate  of  all  the  figures,  and  probably 
Magazine  jg  not  far  from  the  true  amount.  The  really  surpris- 
ing thing  about  this  figure  is  that  it  is  largely  the  re- 
sult of  about  twenty  years'  growth.  This  form  of  advertising, 
after  a  brilliant  career,  is  just  now  passing  through  what 
may  be  termed  a  period  of  readjustment.  The  indications  are 
that  it  will  come  out  of  the  period  of  remaking,  on  a  sounder 
basis  than  it  has  ever  been  on  before. 

Truman  A.  Deweese,  director  of  publicity  of  the  Shredded 
Wheat  Company,  in  an  address  before  the  Sphinx  Club  in 
New  York  {Printers'  Ink,  March  23,  1910,  p.  104),  outlines  the 
advantages  of  magazine  advertising  as  compared  with  various 
other  forms,  and  takes  the  ground  that  this  type  of  medium 
"is  all  there  is  to  national  advertising."  He  contends  that 
magazine  advertising  gets  prestige  on  account  of  the  exclusive 
and  high-grade  type  of  advertiser  who  is  in  a  position  to  use  it, 
from  the  length  of  life  of  the  medium,  from  the  dignity  of  its 
appeal,  and  from  the  uniformity  of  rates  and  the  low  cost  of 
circulation  per  capita. 

The  real  importance  of  this  medium  in  the  advertising  field  — 
particularly  in  connection  with  national  advertising — is  not  easily 
measured  in  figures,  but  some  idea  of  it  may  be  obtained  from 
a  few  statistics  showing  the  number  of  lines  of  advertising 
carried  by  68  leading  publications  in  1911.  These  did  not 
include  any  trade  papers,  and  the  list  covers  only  publications 
with  large  general  cirfculation.  {Printers'  Ink,  January  18,  1912, 
pp.  92-93).  The  figures  show  that  26  general  publications 
carried  4,533,000  lines  in  1911,  while  16  "class"  papers  (such 
as  Motor,  System,  Outing,  Country  Life  in  America,  etc.),  carried 
nearly  3,980,000  lines,  and  13  women's  magazines  carried  nearly 
3,290,000  lines,  and  13  weeklies  carried  5,385,000  fines  —  a  total 
of  nearly  17,000,000  lines  for  the  68  publications. 


72  ADVERTISING  AS  A  BUSINESS  FORCE 

The  characteristic  thing  about  magazine  advertising  as 
a  whole  is  the  growing  tendency  to  set  charges  for  advertising 
space  at  a  figure  commensurate  with  the  size  and  character 
of  the  circulation. 

Out-of-door  advertising  also  has  been  standardized  to  a  large 
degree.     Practically  all  of  the  3,000  or  more  local  bill-posting 
New       companies  in  the  country  belong   to   the    National 
Methods     Poster  Advertisers' Association.     Through  this  organ- 
door  Ad-    ization  is  handled  that  portion  of  the  business  of  these 
vertising     companies  which   is  not   purely  local   in  character. 
This  is  about  30  per  cent,  of  their  total  business,  the  70  per 
cent,   being   such  work  as   theatre  posting,  which   is  handled 
by  the  local  concern  without  intervention  by  the  Association. 

*The  National  Association  does  not  fix  the  rates  charged  bj^ 
its  members.  It  insists,  however,  that  they  shall  not  exceed  the 
maximum,  which  is  20  cents  per  sheet  per  month,  nor  fall  below 
the  minimum,  9  cents  per  sheet  per  month. 

All  boards  are  of  standard  size  and  construction,  and  the 
Association  maintains  detailed  systems  of  inspection,  has 
organized  solicitors,  and  operates  a  system  of  receiving,  execut- 
ing and  checking  orders  on  a  nation-wide  scale.  The  details 
of  this  system  are  told  in  the  article  referred  to  earlier  in  this 
paragraph.  The  most  important  point  is  the  fact  that  this 
branch  of  advertising  has  within  a  few  years  been  reduced  to 
a  stable  and  reliable  basis,  whereas  it  formerly  was  in  a  bad 
state  of  disorganization.  The  Association  is  now  in  process  of 
justifying  itself  before  the  Sherman  Law. 

For  many  lines  of  goods,  cards  in  street  railway  cars  have 

o,     ,     grown  very  popular  within  the  past  ten  years.     A  list 

Railway    of  grocery  producers  who  were  using   car  cards  for 

Advertis-  ^i^j^spread  campaigns  in  1910  includes  the  following : 

♦National  Biscuit  Co.,  Joseph  Campbell  Co.,  Walter  M. 
Lowney  Co.,  National  Starch  Co.,  Van  Camp  Packing  Co., 

*Printers'  Ink,  May  23,  1912,  p.  3. 


PROBLEMS  OF  MEDIUM  SELECTION  73 

American  Sugar  Refining  Co.,  Quaker  Oats  Co.,  National 
Food  Co.,  Corn  Products  Co.,  Burnham  &  Morrill,  Day- 
ton Spice  Mills,  Ghirardelli  Co.,  Foulds  Milling  Co.,  Duff's 
Molasses,  Gorton-Pew  Fisheries,  Sapolio,  Ivory  Soap,  The  N. 
K.  Fairbank  Co.,  Shinola  Co.,  Nugget  Polish  Co.,  Globe  Soap 
Co.,  Luntz  Bros.,  Leet  Bros.,  Chas.  B.  Knox  Co.,  Carno  Mills, 
Merrell-Soule  Co.,  F.  H.  Leggett  &  Co.,  Woolson  Spice  Co., 
Armstrong  Packing  Co.,  Kinkasi  Provision  Co.,  Southern 
Cotton  Oil  Co.,  Pillsbury- Washburn  Co.,  Southern  Mfg.  Co., 
Towle  Syrup  Co.,  Joseph  Burnett  Co.,  Beech  Nut  Packing  Co., 
Holbrook's  Sauce,  Swift  &  Co.,  Cermon  &  Co.,  Postum  Cereal 
Co. 

This  list  might  be  materially  extended  by  including  concerns 
advertising  locally,  or  within  a  short  radius.  And  similar  lists 
might  be  prepared  covering  drug  specialties  and  even  wearing 
apparel. 

This  medium,  while  still  comparatively  new,  is  taking  its 
place  among  the  most  effective  mediums  for  widespread 
campaigns,  and  the  cards  have  been  standardized  and 
rates  reduced  to  a  basis  having  definite  relation  to  service. 
Most  of  the  car  advertising  in  the  United  States,  Canada  and 
Mexico  is  under  the  control  of  the  Street  Railway  Advertising 
Company. 

And   so   we  might  go  through  the  entire  list   of   principal 

rpj  types  of  advertising  medium  and  find  the  same  evo- 

Relation    lution  taking  place.     Each  is  settling  down  to  some- 

of  Adver     ^i^[^„   \[]^q   a   tangible  method    of   relating   cost  to 

hsmg  •  1         1 

Charges  to  service  rendered. 

K^^7^^^  But  the  problem  of  medium  selection  is  not  merely 
a  question  of  pickmg  out  different  types  of  medium 
calculated  to  produce  a  pre-determined  effect  on  a  chosen  lot  of 
consumers;  it  involves  also  very  intricate  difficulties  in  corre- 
lating different  types  of  advertising  so  that  the  results 
from  each  will  supplement  the  other  to  the  greatest  possible 
extent. 


*Printers'  Ink,  February  2,  1912,  p.  54. 


74  ADVERTISING  AS  A  BUSINESS  FORCE 

Obviously  the  advertising  medium  field  di\'ides  itself  into 
two  great  groups,  national  or  general,  and  local  or  direct.  The 
first  group  represents  the  field  of  activity  of  the  producer  or 
general  distributor  and  the  latter  belongs  primarily  to  the 
retailer.  The  fields  have  been  described  as  being  designed 
respectively  to  put  goods  on  the  retailers'  shelves  and  to  take 
them  off  of  those  same  shelves.  And  much  has  been  written 
about  the  need  of  cooperation  between  these  two  fields  of 
appeal  to  the  consumer. 

By  some  it  is  contended  that  the  advertising  campaign  of 
the  producer  ought  to  embrace  the  appeal  in  both  fields,  since 
they  are  merely  parts  of  the  same  continuous  distribution 
process.  By  others  it  is  held  that  the  processes  are  distinct 
and  that  they  can  best  be  performed  separately  by  the  general 
and  the  retail  distributors  respectively. 

AN  EXPERIENCE  IN  TRYING  TO  CORRELATE  NATIONAL  AND 
LOCAL  MEDIUMS 

An  interesting  case  in  point  is  the  record  of  results  secured 
by  a  concern  manufacturing  caps,  which  undertook 
Atemft  to  to  do  local  advertising  for  a  selected  list  of  163  of 
Correlate  Jts  retail  dealers,  and  found  the  results  unsatisfactory, 
^tnd  "^  {Advertising  and  Selling,  February,  1912,  p.  40 ;  March, 
Local  Ad-    1912,  p.  88.) 

vertismg  ^pj^.^  concern  made  arrangements  with  163  retail 
houses  to  do  local  advertising  for  them,  and  this  hst  of  houses 
to  be  helped  included  a  wide  variety  of  types  —  city  houses 
with  big  trade,  small  town  and  country  dealers;  some  were 
extensive  and  some  meagre  advertisers  on  their  own  account. 
This  local  paper  advertising  was  undertaken  in  addition  to 
various  other  dealer  helps,  such  as  style  books,  display  cards,  etc. 
Three  forms  of  agreement  were  worked  out.  In  one  the 
Results  manufacturer  paid  for  all  the  local  space,  under 
Secured  specified  conditions;  in  the  second  he  paid  for  one 
half  of  it,  and  in  the  third  he  paid  for  the  cut  space  only.     The 


PROBLEMS  OF  MEDIUM  SELECTION  75 

first  was  adopted  by  72  houses  in  two  seasons,  at  tlie  end  of 
which  the  business  done  with  these  houses  fell  off  from  $77,000  to 
$48,500  —a  net  loss  of  $28,500  including  23  houses  lost  outright, 
and  33  reducing  their  orders.  The  23  houses  adopting  the 
second  plan  reduced  their  business  from  $31,000  to  $22,100  — 
a  net  loss  of  $8,900,  8  having  dropped  out  altogether  and  7 
having  reduced  their  business.  The  third  plan  fared  a  little 
better,  being  adopted  by  68  houses,  of  which  11  were  lost,  and 
22  reduced  their  purchases,  the  sales  to  the  houses  using  this 
plan  declining  from  $47,100  to  $43,000  — a  loss  of  $4,100. 
(These  and  other  data  are  given  in  Advertising  and  Selling,  Feb- 
ruary, 1912,  pp.  43-44.) 

Commenting  on  these  figures  the  advertising  manager  of  the 
concern  says : 

*Now,   our  163  customers,  as  per  these  tables,  purchased 

a  total  of  $155,571  for  the  seasons  of  1910  and  spring 

What  the   1911.      Those  of  the  number  who   "repeated"    and 

Advertis-  stayed  with  us  made  purchases  for  the    seasons   of 

Manager   spring  1911  and  fall  1911  totaling  about    $113,651, 

Found  the  decrease  being  $41,920,  or  26  per  cent,  instead  of 
15  per  cent. 

Selecting  further  unpleasant  facts  from  the  tables,  we  find 
that  among  the  customers  who  "repeated"  and  stayed  with  us, 
there  was  a  greater  decrease  in  business  than  we  could  reason- 
ably' expect,  when  we  compare  their  purchases  for  the  two 
different  seasons  and  make  an  allowance  of  a  varying  average  of 
10  to  25  per  cent,  to  cover  the  sales  of  overcoats,  which,  of 
course,  are  not  purchased  as  heavily  in  the  spring  as  in  the  fall, 
and  vice  versa. 

Thus,  we  might  continue  our  investigation  of  the  different 
kinds  of  losses  these  tables  reveal.  But  "enough  is  plenty," 
particularly  when  we  aren't  pleased  with  it.  Besides,  what  if 
we  were  compelled  to  figure  the  total  gains  or  losses  of  our 
entire  business  from  the  evidence  contained  in  these  tables.'* 
To  do  so  would  surely  indicate  that  if  we  had  been  losing 
business  in  general  at  the  same  rate  during  the  same  period, 
we'd  have  to  close  the  doors  and  quit  business  here  pretty  soon. 

But  we  won't.     We're  going  to  stick  right  in  the  game. 

*Advertising  and  Selling,  March  1912,  pp.  88  et  seq. 


76  ADVERTISING  AS  A  BUSINESS  FORCE 

We've  been  improving  our  product  and  service  right  along. 
And  our  direct-to-dealer  campaigns  for  new  business  have  been 
decidedly  successful.  While  we  were  doing  this  localized  news- 
paper advertising  our  total  gains  in  new  accounts  were  50  per 
cent,  in  excess  of  our  total  numbeT  of  lost  customers.  The  only 
important  feature  of  this  is  that  this  gain  was  not  the  result  of 
our  localized  newspaper  advertising.  Had  it  been  these  tables 
would  never  have  been  prepared. 

These  returns  having  been  received,  the  advertising  manager 
set  about  trying  to  draw  from  his  experience  conclusions  which 
would  make  the  experience  useful  in  future  campaigns. 

In  the  first  place,  he  was  forced  to  conclude  that  he,  at  a 
distance  from  the  local  market,  could  not  gauge  satisfactorily 
the  quantity  of  local  advertising  which  would  be  most  useful 
in  a  large  number  of  localities.  In  the  second  place,  he  came  to 
believe  that  the  quality  of  the  advertising  done  locally,  at  long 
range,  was  poor.  The  copy  was  necessarily  of  a  general  type  — 
or  "kettle"  advertising  —  dozens  of  places  with  all  kinds  of 
varying  conditions  being  served  with  copy  from  the  same  "pot," 
and  localized  merely  by  "sold  exclusively  by"  and  the  dealer's 
name  at  the  bottom  of  the  advertisement. 

Summing  up  the  results  of  this  campaign  this  advertising 
manager  says: 

In  view  of  the  above  study  of  these  tables  and  our  discussion 
of  the  facts  they  disclose  we  can  come  to  but  one  conclusion 
regarding  localized  newspaper  advertising :     That  it  is 
The  Ad-    expensive   and   unfortunate   philanthropy,    not    suc- 
vcrhstng^    cessful  selling  assistance.     Let  the  manufacturer  man- 
Condu-^  'lifdciure  and  let  the  retailer  retail.     The  manufacturer 
sions      who  attempts  localized  newspaper  advertising  cannot 
control   trade   conditions,    cannot   control    the    mer- 
chandising methods  of  his  customers,  cannot  prevent  losses  in 
business  by  means  of  his  retail  advertising,  cannot  publish  in 
the  retail  fields  anything  but  stereotyped,  unvarying,  kettle 
co])y,  and  not  enough  of  that  at  a  reasonable  expense  to  get 
desired  results. 

Why   should   the   manufacturer   break   Into   the   retailer's 


PROBLEMS  OF  MEDIUM  SELECTION  77 

legitimate  field,  anyway?  Just  as  sure  as  he  does  he  begins  to 
promote  commercial  indolence,  and  to  rob  the  retailer  of  his 
initiative,  his  business  independence  and  energy,  his  desire  to 
beat  competition.  Just  as  sure  as  the  manufacturer  attempts 
to  take  over  any  part  of  the  retailer's  legitimate  duty  and 
privileges  he  just  as  surely  causes  the  retailer  to  lose  his  grip  on 
his  own  business. 

Furthermore,  your  good  live  retailer  doesn't  want  any  of 
your  localized  newspaper  advertising.  He  wants  his  own. 
He  has  a  local  reputation  of  his  own  and  prefers  to  trade  on  it 
instead  of  yours,  whether  he  actually  boosts  your  product  or  not. 
Your  copy  that  merely  gives  him  a  space  for  his  name  at  the 
bottom  of  the  ad  is  not  localized  advertising  and  he  knows  it, 
and  he  knows  that  his  trade  knows  it  too,  and  it  is  this  trade 
he  has  to  depend  on  for  his  life  or  death  in  business. 

The  retailer  is  a  whole  lot  closer  to  his  trade  than  the  manu- 
facturer is.  He  is  a  personal  friend  of  two  thirds  of  the  people 
who  come  into  his  store  for  merchandise.  Why  shouldn't  he 
do  his  own  talking  to  them?  Why  let  you  do  it?  Is  it  any* 
wonder  that  he  is  indifferent  to  the  manufacturer's  effort  to 
usurp  by  mechanical  methods  both  his  advertising  functions 
and  rights?  Can  you  blame  him  for  even  actively  objecting  to 
having  his  advertising  handled  by  a  man  who  may  be  a  thou- 
sand miles  away  from  the  firing  line?  And  should  the  manu- 
facturer attempt  to  make  kettle  copy  (even  though  it  may  be  of 
Krupp-gun  power  intrinsically)  produce  business  for  a  hundred 
different  retailers  in  a  hundred  different  places? 

Such  advertising  is  misdirected  effort  and  will  weaken  and 
not  strengthen  the  position  of  both  the  manufacturer  and 
retailer.  You  can  help,  you  can  enthuse  the  dealer,  you  can 
incite  him  to  action,  but  don't  do  his  advertising  for  him. 

ADVERTISING   ABILITY   AND   THE   VALUE   OF  MEDIUMS 

Whether  or  not  one  agrees  that  this  single  experience  justifies 
these  rather  sweeping  conclusions,  he  will  find  in  it  a  specific 
case  of  great  interest.  Perhaps  the  failure  was  due  to  poor 
planning  or  poor  execution.  In  any  case,  the  results,  beyond 
a  doubt,  did  not  justify  the  time  and  money  spent  in  getting 
them.  Possibly  the  fault  was  individual,  although  this  hardly 
accounts  for  the  uniformity  of  the  failures. 


78  ADVERTISING  AS  A  BUSINESS  FORCE 

The  advertiser's  ability  to  make  profitable  use  of  a  medium 
may  have  little  relation  to  the  instrinsic  value  of  the  medium. 
But,  obviously,  this  ability  is  one  of  the  important  factors  to  be 
considered  in  making  the  choice  of  medium  to  be  employed. 
James  H.  Collins  discusses  this  in  an  article  on  "Advertising 
Mediums  of  To-morrow."     In  the  course  of  this  article  he  says: 

*During  the  past  five  years  thousands  of  manufacturers  who 
never  advertised  before  have  tested  this  new  resource  of  selling. 
Some  have  gone  into  national  mediums  only  to  discover 
J)       jg    that  the  best  thing  for  them  was  intensive  develop- 
on  the     ment  of  territory  around  home,  where  their  distri- 
Skill  with  bution  is   strong.     Others  have   begun   locally,    and 
Which     found  that  it  was  possible  to  expand  the  campaign  to 
MediMms  national  proportions.    Manufacturers  in  trade  journals 
have  broken  new  ground  by  entering  general  mediums, 
and  those  in  general  mediums  have  strengthened  their  trade 
•journal  work.     General  mediums  begin  to  take  on   a   strong 
flavor  of  dealer  argument  in  many  cases,   and  at  the  same 
time    purely    general    copy    addressed    to    the    consumer    is 
found  in  trade  publications.    National  mediums  have  been  used 
for  local  purposes.     Local  mediums  have  been  used  to  secure 
a  national  effect,  and  local  advertising  backed  up  by  national 
methods  of  follow-up. 

In  other  words,  as  advertisers  learn  how  to  advertise,  the  fine 
differences  between  mediums  tend  to  disappear.  Most  of  them 
are  arbitrary,  anyway  —  distinctions  made  for  space-selling 
purposes. 

The  time  is  at  hand  when  the  advertiser,  asked  to  name  the 
best  medium,  will  no  longer  knit  his  brow  in  thought.    He  will 
laugh.     He  knows  that  all  good  mediums  are  neces- 
Naming    sary,  and  that  the  best  is  an  ideal  combination  of 
Medium    them  all,  each  in  its  place,  and  every  one  pulling  to  a 
common  end. 
This  being  so,  the  men  who  publish  the  mediums  and  sell  the 
advertising  space   will  unquestionably   be   found   working   to- 
gether more  closely  to-morrow  than  they  are  to-day.     It  is  not 
to  be  expected  that  competition  will  cease.      That  is  not  to  be 
desired.     But  on  certain  fundamentals  they  are  bound  to  work 
together.     It  is  in  line  with  all  business  development  nowadays. 

^Printers  Ink,  April  i,  1912,  p.  24. 


PROBLEMS  OF  MEDIUM  SELECTION  70 

111  our  first  chapter  we  discussed  the  importance  of  com- 
mercial analysis  as  a  part  of  advertising  plans  for  goods  to  be 
sold  finally  at  retail.  In  the  second,  we  examined  some  of  the 
problems  growing  out  of  the  disorganization  of  the  distribution 
system  leading  to  the  retailer.  In  the  two  succeeding  chap- 
ters we  tried  to  show  how  the  advertiser  who  starts  with  an 
appreciation  of  the  selling  problem  suggested  m  these  two 
former  discussions  may  first  select  the  end  for  which  he  is  to 
strive,  and  then  may  set  about  choosing  means  for  the  attain- 
ment of  that  end. 

In  all  this,  while  we  have  adhered  to  concrete  illustrations  as 
closely  as  possible,  we  have  been  obliged,  for  the  sake  of  clarity, 
to  make  our  statement  of  problems  much  simpler  than  are  the 
actual  conditions  which  they  illustrate.  For  instance,  an 
advertiser  can  seldom  sit  down  at  the  very  beginning  of  his 
business  career  and  "by  taking  thought"  work  out  a  plan  of 
campaign  which  never  will  need  change.  The  conditions  with 
which  the  advertiser  deals  are  not  merely  fluid,  but  they  are  at 
high  pressure  as  well.  There  is  not  much  exact  knowledge 
about  these  conditions,  but  such  as  there  is  may  be  made 
useful. 

Every  man  familiar  with  advertising  records  could  supply 
cases  showing  how  the  available  means  for  studying  the  inter- 
relations of  selling  and  advertising  problems  have  been  used 
profitably.  Almost  any  really  well  worked  out  campaign 
shows  how  one  after  another  of  the  problems  we  have  presented 
here  has  come  up  for  solution.  Before  we  go  on  to  a  more 
detailed  study  of  advertising  and  its  relations  to  the  successive 
steps  in  distribution  suppose  we  look  at  a  concrete  case  which 
illustrates  some  of  the  points  we  have  made. 

THE   STORY   OF   CARNATION   MILK 

Take,  for  instance,  the  case  of  "Carnation  Milk"  as  it  is  told 
by  A.  Rowden  King  of  the  Ethridge  Company.  It  is  interesting 


80  ADVERTISING  AS  A  BUSINESS  FORCE 

to  see  how  many  of  the  points  we  have  made  so  far  find  concrete 
illustration  in  this  story  as  it  is  told : 

*It  isn't  easy  to  revolutionize  the  public's  buying  habits. 
The  young  salesman  of  bottled  water  who  was  assigned  the 
state  of  Kentucky  complained  bitterly  of  that  fact. 

When  the  public  wants  meat,  bread  or  candlesticks,  it  nat- 
urally turns  to  the  butcher,  the  baker  or  the  candlestick 
maker,  as  the  case  may  be. 

The  advent  and  growth  of  our  modern  department  stores, 
those  giants  of  retailing,  have  probably  done  more  to  change 
the  public's  habits  of  buying  than  anything  else;  but  peculiar 
conditions  of  the  manufacturing  field  are  evolving  quite  as 
momentous  changes  in  certain  cases. 

It  is  'particularly  difficult  for  a  manufacturer  to  bring  about 
a  change  in  the  public's  buying  habits  when  he  wishes  to  take  a 

„.         staple  article  away  from  one  group  of  retailers  who 

DifRculfu  have  always  centred  their  business  solely  about  it,  and 

of        give  it  to  another  group  of  retailers  who  have  long 

Changing  handled  and  would  still  continue  to  handle  many  other 

Buying    staples  besides  the  article  in  question.      For  instance, 

it  was  comparatively  easy  to  make  it  seem  natural 

for  the  public  to    ask    for    Rubberset  Shaving    Brushes    and 

Gillette   Safety  Razors   at   the   haberdasher's,  or  for  camera 

supplies  and  stationery  at  the  druggist's,  or  flower  seeds  at  the 

grocer's.     In  these  instances  the  new  lines  have    simply  been 

added  to  those  already  being  handled  by  the  retailers. 

But  it  is  a  very  different  matter  for  the  Pacific  Coast  Con- 
densed Milk  Company,  manufacturing  and  selling  Carnation 
ISIilk  to  attempt  to  transfer  the  nation's  supply  of  milk 
Trying  to  from  the  hands  of  the  milkman  to  those  of  the  grocer,  and 

PaHoAhe  *o  ™^^^^  o*  *^^  ^^^^^^  '"^^^^  Modern  Milkman."     Milk 

Milk      is  the  staple  of  staples,  and  an  even  more  essential  com- 

Business  modity  than  sugar,  which  has  always  stood  to  the  fore 

from  the    among  the  five  thousand  odd  things  which  wholesale 

^^to^the^  and  retail  grocers  almost  invariably  sell.     That  the  Pa- 

Grocer     cific  Coast  Condensed  Milk  Company  has  had  such 

phenomenal  success,  that  with  the  present  season  it  has 

entered  the  field  of  national  advertisers  in  an  aggressive,  large 

way,  is  why  this  story  —  a  recital  of  that  success  —  is  timely. 

Certain  remarkable  statistics  may  well  serve  to  clinch  the 

*  Advertising  and  Selling,  May,   1912,  p.  37. 


PROBLEMS  OF  MEDIUM  SELECTION  81 

reader's  interest.     This  company  began  doing  business  with 

one  small  condensery    at   Kent,  Washington,   in    the   fall    of 

„     ,.    1899.       Its  output  at  that  time  consisted  of  60  or  70 

Plant A  cases  of  milk  a  day.     To-day,  not  thirteen  years  after- 

Special  ward,  this  company  has  fourteen  immense  plants  in 
Product —  the  states  of  Oregon,  Washington,  Wisconsin  and  Illi- 

Remotc     j^QJg        j|.  jjg^g  jj-g  q^jj  ^.^^  factory  with  a  capacity  for 

from  tts'  m  ••  .  iTt/ 

g^gf  '    turning  out  half  a  million  cans  in  ten  hours.     The 

Market    story  is  told  of  little  Tommy  who  went  to  visit  his  cou- 

and  with   sins  in  the  country.    He  at  once  showed  a  lively  interest 

D-'^l       in  the  dairy.     "How  much  milk  does  that  cow  give.'" 

he  asked  his  uncle  when  he  found  him  milking  one 

day.      "Don't  give  nothin',"  replied  that  gentleman;  "you've 

got  to  iake  it  from  her."     It  has  been  much  the  same  with  the 

Pacific  Coast  Condensed  Milk  Company.       Success  has  been 

wrought  in  the  face  of  imminent  defeat.     From  the  present 

volume  of  business  it  would  appear  that  success  had  been  as 

easy  as  falling  off  a  log;    as  a  matter  of  fact,  it  has  been  more 

like  selling  water  in  Kentucky.     Every  inch  of  the  ground  has 

had  to  be  fought  over. 

In  the  selling  and  the  advertising,  prejudice  has  been  the  great 
stumbling-block,  and  educational  methods  to  enlighten  the  pub- 
lic have  been  necessary  from  the  start.     In  1899  people 
Product    thought  that  evaporated  milk  could  not  be  manufac- 
and  the    tured  without  adding  something  to  it;    a  chemical  or 
Consumer  something  of  that  kind.     That  same  prejudice  is  still 
at  the     jjjgi-  with  to-day,  though  to  a  less  degree,  due  to  the 
intensive  advertising  of  an  educational  nature  which 
has  been  done  on  Carnation  Milk.     The  public  has  always 
tended  to  consider  canned  milk  as  something  primarily  of  use 
in  emergency  cases  when  fresh  milk  cannot  be  had. 

E.  A.  Stuart,  the  head  of  the  business,  had  been  a  wholesale 
grocer  in  Los  Angeles.      His  business  acquaintanceship  in  Cali- 
fornia was  extensive.  Yet  the  first  year's  results  were 
The  Dis-   nothing  short  of  discouraging.     That  year,  with  three 
Svltem°^t  ^^  ^^^  salesmen  and  a  number  of  women  demonstrators 
the  Start    working,  only  about  1,200  cases  were  sold.       During 
those   early   days  the   largest  jobbers   in  the  West, 
among  them  the  wholesale  house  from  which  Mr.  Stuart  had 
withdrawn,  Craig,  Stuart  &  Co.,  doing  an  aggregate  business  of 
a  million  and  three  quarters  dollars,  did  not  average  two  cars 
a  year. 


82  ADVERTISING  AS  A  BUSINESS  FORCE 

Yet  Mr.  Stuart  was  convinced  that  evaporated  milk  could  be 
taken  out  of  the  emergency  class  and  placed  among  the  necessi- 
ties, and  his  belief  was  all  the  more  strengthened  when 
The  Plan  j^g  found  that  certain  of  his  competitors,   who  had 
Ihe  Cam-  been  longer  established,  had  been  trying  to  get  the  con- 
mercial    trol  of  his  business  away  from  him  by  roundabout 
Aspects    means.      It  was  in  the  days  when  the  great  country 
of  Goods  ^Q  ^jjg  northwest,  the  Klondike  and  Alaska,  was  open- 
Market    '^^^  ^^P'  ^^^^  ^^^-  Stuart  took  suitcases  of  the  milk  out 
himself  and  retailed  it,  a  few  cases  at  a  time,  to  par- 
ties then  fitting  themselves  out  for  a  dash  in  the  Land  of  Gold 
to  the  north. 

These  and  other  like  experiences  were  hard,  but  they  estab- 
lished the  footing  for  the  product.  Gradually  good  salesmanship, 
combined  with  a  little  local  advertising  with  paint  and  in  the 
newspapers  on  the  coast,  had  its  results,  and  it  was  not  many 
years  thereafter  when  the  necessity  for  more  plants  became 
apparent.  The  State  of  Washington,  with  its  cool,  pure  streams 
and  its  green  grass  the  year  'round,  had  proved  an  ideal  locality, 
and  the  additional  western  plants  which  have  been  built  are  in 
that  state  and  in  Oregon. 

Certain  principles  have  been  strictly  adhered  to  from  the  be- 
ginning in  the  Carnation  Milk  selling  scheme.       The  company 
has  been  a  stanch  supporter  of  the  strictly  wholesale 
r/ie       grocer.      Says  Mr.  Stuart:     "We  do  not  favor  selling 
Selection   gyen  semi-jobbers.     We  endeavor  to  strongly  protect 
btition'  the  jobbers'  interests.     We  realize  we  cannot  carry 
Plans     water  on  both  shoulders  and   we  want  to  work  in 
harmony   with    the   jobbers.     I    have   turned   down 
many  an  order,  when  it  has  seemed  hard  at  the  time  and  when 
I  was  anxious  for  business,  to  protect  the  jobber,  knowing 
that,  if  I  filled  the  orders,  I  would  create  ill  will.     Often  a  semi- 
jobber  has  sent  in  an  order  for  Carnation  in  carload  lots  and  it 
has  been  a  temptation  to  fill  it,  but  we  have  had  the  backbone 
to  say:     'No,  sir.'     For  that  reason,  in  the  localities  where  we 
have  Carnation  Milk  well  established  and  the  jobbers  know  of 
our  policy  of  doing  business,  they  will  stand  to  the  front  and 
help  us  fight  our  battles." 

Mr.  Stuart  also  has  his  well-defined  opinions  on  the  question 
of  overstocking  retailers  and  jobbers,  which  is  often  attempted 
in  so  many  lines  and  especially  in  the  grocery  trade.  Saj's  he: 
"  I  would  rather  sell  a  man  25  cases  once  a  week  than  100  cases 


PROBLEMS  OF  MEDIUM  SELECTION  83 

once  a  month.  To  sell  the  retailer  or  jobber  what  he  considers 
to  be  his  requirement  for  a  given  period  is  a  whole  lot  better 
than  doubling  that  amount  for  a  longer  period.  It  creates  a 
better  feeling  and  reinforces  the  confidence  of  a  buyer  in  Car- 
nation Milk  if  he  is  compelled  to  purchase  Carnation  Milk  often. 
"I  overstocked  two  merchants  in  San  Francisco  once.  They 
gave  me  orders  for  carloads  more  as  a  compliment  than  any- 
thing else.  I  called  on  them  a  month  or  six  weeks  after  delivery 
and  they  told  me  the  milk  was  selling  very  well.  I  called  on 
them  in  about  four  months  and  they  said  it  was  selling  slowly 
and  they  seemed  to  be  discouraged.  I  did  not  want  them  to  feel 
that  way  about  my  product,  so  I  asked  them  how  much  they 
had  left.  One  had  285  cases  out  of  500  and  the  other  had  225 
cases,  and  I  took  the  surplus  milk  off  their  hands  and  gave  them 
my  check  for  it.  I  told  them  I  would  be  glad  to  supply  them 
thereafter  with  what  they  thought  their  trade  would  require. 
A  little  later  they  gave  me  orders  for  25  cases  a  week  and  it  was 
not  four  weeks  until  they  replaced  these  orders  with  carloads, 
and  since  then  they  have  bought  hundreds  of  carloads.  They 
simply  had  got  discouraged  because  they  were  overstocked, 
and,  by  taking  the  milk  off  their  hands,  I  renewed  their  confi- 
dence and  they  were  able  to  sell  more  goods." 

Until  the  present  year,  the  advertising  account  has  solely 
consisted  of  outdoor  publicity;    that  is,  painted  walls,  painted 

bulletins,  posters  and  car  cards.  This  has  been  sup- 
Ch  f  pl^i^^nted  by  a  little  local  advertising,  at  times,  in  the 
Mediums  newspapers  of  the  big  cities.       In  the  fall  of  1907,  for 

instance,  paint  was  used  on  walls  and  boards  in  the 
Far  West  and  car  cards  were  used  in  Chicago,  St.  Louis, 
New  Orleans,  Pittsburgh,  Detroit,  Toledo,  St.  Paul,  Minne- 
apolis, Kansas  City,  Omaha,  St.  Joseph,  Sioux  City,  and 
Duluth.  The  Mahin  Advertising  Company,  Chicago,  which 
has  developed  the  account  from  its  inception,  has  seen  the  scope 
of  the  outdoor  advertising  on  Carnation  Milk  grow  until  this 
year  all  varieties  of  outdoor  advertising  are  being  used  through- 
out the  country  in  forty-two  big  cities  and  surrounding  terri- 
tories. 

In  its  educational  advertising  the  Pacific  Coast  Condensed 
Milk  Company  has  not  only  had  the  antipathy  of  the  public 
in  general  against  all  canned  milks,  but  it  has  had  the  com- 
petition of  other  canned  milks,  selling  at  a  lower  price  per 
can. 


84  ADVERTISING  AS  A  BUSINESS  FORCE 

But  Mr.  Stuart  has  felt  the  courage  of  his  convictions.  He 
went  into  the  business  because  he  beUeved  that  it  had  a  big  un- 
foreseen future  ahead  of  it.  He  has  felt  that  raw  milk, 
A  New  as  it  is  left  at  the  consumer's  back  door  by  the  milk- 
Idea  of  the  man,  is  unclean,  germ-laden  and  disease-breeding. 
Goods  Was  Furthermore,  he  has  known  that  raw  milk  is  expensive 
in  "^ Minds  because  the  fastest  and  most  costly  train  service  is 
of  Dealers  necessary  in  its  transportation,  and  because  elaborate 
equipment  and  an  army  of  men  are  required  for  door- 
to-door  distribution.  The  cost  of  fast  trains  and  of  fast  dis- 
tribution comprise  more  of  the  cost  of  a  quart  of  raw  milk 
than  the  milk  itself. 

Mr.  Stuart  has  combated  the  popular  belief  that  canned  milk 
is  only  advisable  when  raw  milk  cannot  be  had  (as  on  explo- 
ration expeditions,  on  the  frontier,  in  camps,  etc).,  from  the  very 
first.  He  has  shown  the  grocer  that  in  making  him  "The 
Modern  Milkman,"  Carnation  Milk  is  for  him  a  constructive 
and  creative  force,  enabling  him  to  secure  and  hold  a  business 
which  he  formerly  could  not  get  away  from  the  milkman. 
He  has  shown  the  grocer  that  most  new  products  which  are  put 
on  his  shelves  prosper,  if  they  do  at  all,  at  the  expense  of  the 
other  products  which  he  is  already  handling  by  reason  of  a 
different  dash  of  flavor  or  of  color  or  of  carton.  The  margins 
of  profit  being  equal,  the  grocer  would  just  as  soon  handle  one 
such  product  as  another.  But  Carnation  Milk  opens  a  whole 
new  business  to  the  grocer.  It  is  possible  for  him  to  add  a  milk 
route  to  his  grocery  route  without  additional  trouble  and  with- 
out danger  of  loss  through  spoiling.  A  family  spends,  on  an 
average,  $3  or  more  per  month  for  milk. 

In  advertising  Carnation  Milk  to  the  consumer  the  endeavor 
has  been  to  show  that  Carnation  Milk  is  not  made,  not  manu- 
factured, that  nothing  has  been  added  to  pure  fresh 
The  At-  jjiii]^  iq  obtain  Carnation  Milk,  and  only  water  has 
Consumers  been  removed;  that  imperfect  milk  could  not  be  thus 
canned  because  it  would  sooner  or  later  burst  the  tin. 
Early  in  the  advertising  the  phrase  was  used:  "Carnation 
Milk  —  From  Contented  Cows."  The  latter  phrase,  combined 
with  ever-present  scenes  of  cows  grazing  in  green,  quiet  pastures, 
has  magnified  the  idea  of  sanitation  and  efficiency.     .     .     . 

Two  or  three  years  ago  the  Pacific  Coast  plants  of  the  Pacific 
Coast  Condensed  Milk  Company  became  entirely  inadequate 
to  supply  the  demand.     Indeed  the  trade  had  grown  so  that 


PROBLEMS  OF  MEDIUM  SELECTION  85 

certain  jobbers  who  had  worked  up  handsome  increases  in  their 

sales  were  unable  to  get  the  goods  to  meet  their  requirements. 

It  was  evident  that  additional  plants  were  necessary.       Mr. 

Stuart  saw  that  the  big  future  sales  of  Carnation  Milk  were 

„       p      destined  to  be  in  the  Middle  and  Eastern  states,  and 

duction    ^^  ^^  endeavor  to  save  the  heavy  freight  charges  from 

Conditions  the  Pacific  Coast,  he  made  a  careful  investigation  of  the 

Due  to  Ad-  dairy  conditions  in  the  states  of  Wisconsin  and  Illinois, 

vertismg    ^j^^  ^^^^  year  erected  three  big  new  plants  in  Wisconsin 

and    one    in    Illinois,  each  capable  of    turning  out 

about  2,000  cases  of  milk  a  day. 

This  development  had  a  very  direct  bearing  upon  the  present 
big  advertising  campaign,  the  first  of  national  scope.  It  came 
about  in  this  way :  In  the  old  days,  with  only  the  Far  Western 
plants,  the  company  had  advertised  contented  cows  eating 
"green  grass  the  year  'round."  The  pictures  used  had  shown 
cows  eating  the  perpetual  grass  of  Washington  and  Oregon  with 
the  typical  snow-capped  mountain  scenery  of  those  parts  in  the 
background. 

But  green  grass  could  not  be  had  in  the  states  of  Wisconsin 
and  Illinois  the  year  'round,  and  the  jobbers  knew  it.  When 
some  of  them  learned  of  the  new  plants,  they  wrote  requesting 
that  they  continue  to  receive  shipments  only  from  the  Far 
Western  plants.  "This,"  says  Mr.  Stuart,  "rather  put  it  up 
to  us  to  prove  that,  even  without  green  grass  the  year  'round  in 
Wisconsin  and  Illinois,  it  is  possible  to  have  contented  cows  and 
the  best  quality  of  milk." 

In  order  to  set  the  trade  right,  about  fifty  men  were  invited  to 
be  the  guests  of  Mr.  Stuart  on  a  four-days'  tour  of  inspection 
through  the  new  plants  last  fall.  A  private  train  was  chartered. 
These  men  were  chiefly  brokers  who  sell  Carnation  Milk  in 
different  territories  in  all  parts  of  the  country,  from  Los  Angeles 
to  Boston,  from  San  Antonio  to  Butte. 

But  the  all-important  fact,  from  the  point  of  view  of  the 
advertising  man,  is  the  fact  that  at  the  meetings  of  these  men 
on  this  trip  it  was  planned  to  confer  as  to  the  best  way  of 
going  about  the  first  advertising  campaign  on  Carnation  Milk. 
And  to  help  in  that  confere"nce,  the  following  advertising  men 
were  also  invited  along:  John  Lee  Mahin,  Wilbur  D.  Nesbit, 
M.  O.  Smith,  B.  S.  Presba,  and  F.  M.  Lillie,  all  of  the  Mahin 
Advertising  Company;  A.  P.  Johnson,  Chicago  Record-Herald, 
and  M.  F.  Reddington,  Thos.  Cusack  Company. 


86  ADVERTISING  AS  A  BUSINESS  FORCE 

Meetings  were  held  every  day  on  that  trip  at  which  the  sales 
and  advertising  problems  were  discussed.  Finally,  at  the  last 
meeting,  when  views  had  crystallized,  Mr.  Mahin  asked  each 
broker  to  write  out  his  suggestions,  based  upon  his  knowledge 
of  local  conditions,  as  to  what  the  advertising  should  be.  "We 
want  to  have  your  opinions,"  said  Mr.  Mahin.  "Of  course 
we  cannot  follow  your  suggestions  in  every  case,  but  we  want  to 
have  them  and  to  give  them  careful  consideration." 

As  a  result  of  the  very  valuable  ideas  which  these  brokers 
contributed,  the  present  advertising  campaign  has  been  planned, 
p.  .  It  consists,  as  has  already  been  mentioned,  of  outdoor 
aNew^  advertising  of  every  type  in,  and  radiating  out  from, 
Campaign  forty-two  big  cities.  Thirteen  full  pages  of  copy  have 
on  been  prepared  to  be  run  in  the  big  newspapers  in  the 
National  j^jg  cities.  And  full  pages  and  full  column  advertise- 
ments of  Carnation  Milk  —  many  of  them  in  three 
and  four  colors  or  lithographed  —  began  running  in  the  March 
and  April  issues  of  the  following  national  magazines:  Ladies' 
Home  Journal,  Saturday  Evening  Post,  Woman's  JVorld,  Ameri- 
can Sunday  Magazine,  Delineator,  Designer,  NeiD  Idea,  House- 
keeper, Christian  Herald,  Ladies'  World,  and  Ulusirated  Sunday 
Magazine. 

In  addition,  a  supplementary  campaign  will  be  run  in  the 
recreation  publications.  One  hundred  and  twelve  lines  will  be 
run  twelve  times  in  Outing,  Recreation  Sports  Afield,  National 
Sportsman,  Field  and.  Stream,  Forest  and  Stream,  Outdoor  Life, 
Outers'  Book,  and  Hunter,  Trader  and  Trapper. 

The  copy  makes  an  interesting  study.  Naturally,  with  the 
coming  of  the  Middle  West  factories,  the  reference  to  cows  feed- 
ing on  green  grass  the  year  'round,  and  the  snow-capped  peaks 
in  the  background  of  the  grazing  scenes,  have  been  omitted.  A 
vital  feature  of  the  campaign  is  a  positive  guarantee  carried 
in  the  full-page  copy,  reading  in  part  as  follows:  "Order  a  10- 
cent  can  of  Carnation  Milk  from  your  grocer,  and  if  you  find 
that  Carnation  Milk  does  not  please  you  better  in  every  way 
than  fresh,  raw  milk,  or  than  any  other  evaporated  milk  or 
condensed  milk,  write  us  and  we  will  cheerfully  refund  your 
money  and  postage." 

Every  piece  of  copy  of  whatever  size  is  strongly  educational. 
The  advantages  of  Carnation  Milk  are  emphasized,  which  is 
simply  "pure,  wholesome  milk  to  which  nothing  has  been  added 
and  from  which  nothing  has  been  taken  away  but  water"  as 


PROBLEMS  OF  MEDIUM  SELECTION  87 

compared  with  ordinary,  raw  milk,  which  is  "hauled  100  or  200 
miles  in  large,  presumably  clean,  cans,  in  express  cars,  bumped 
and  jarred,  dumped  out  on  platforms  in  the  sun  to  be  handled 
by  grimy  fingers,  bottled  in  a  dimly  lighted  room  and  delivered 
on  your  back  step  before  daylight." 

The  comparison  is  also  made  between  Carnation  Milk  and 
the  old-time  condensed  milk,  "thick,  stringy,  ropy  —  with 
sugar  added  which  gave  it  body." 

In  addition,  every  advertisement  pictures  and  describes 
one  excellent  use  for  Carnation  Milk,  as,  for  instance,  for  school 
children,  on  the  picnic,  for  the  baby,  in  cooking.  The  reader  is 
urged  to  send  for  a  book  of  recipes  which  describes  scores  of 
other  uses.  All  of  this  educational  advertising  is  aimed  at  the 
deep-seated  public  tendency  to  put  canned  milks  in  the  emer- 
gency class. 

In  addition,  of  course,  a  splendid  set  of  cut-outs,  window 
displays,  and  other  dealer-aids  have  been  prepared  and  the 
grocer  is  urged  to  send  for  them. 

A  very  handsome  twenty -page  book  of  about  the  page  size  of 
Collier  s,  printed  in  three  colors  and  called  the  Carnation  Herald, 
has  been  prepared  and  sent  to  the  grocers.  In  it  the  whole 
Carnation  story  is  told  from  many  different  angles  as  well  as  the 
facts  about  the  present  year's  campaign  of  advertising,  pre- 
sented in  a  form  that  must  convince. 

REVIEW    QUESTIONS  —  CHAPTER   IV 

1.  What  is  Printers'  Ink's  estimate  of  the  total  United  States 
outlay  for  the  twelve  types  of  advertising  in  their  list.'* 

2.  What  is  being  done  to  put  advertising  on  a  more  stable 
basis  in  some  of  the  leading  lines?  Are  these  improvements 
being  made  at  the  instigation  of  the  public,  the  advertisers,  or 
the  operators  of  the  mediums  themselves  .f*  Who  gets  the  most 
benefit? 

3.  What  was  the  plan  of  the  cap  manufacturer  for  making 
his  national  and  local  advertising  work  together?  How  did  it 
work? 

4.  If  you  were  asked  to  name  the  best  type  of  medium  for 
advertising  men's  caps,  what  would  you  have  to  know  about 
the  plan  of  campaign  before  you  could  answer? 


88  ADVERTISING  AS  A  BUSINESS  FORCE 

5.  What  did  the  Pacific  Coast  Condensed  Milk  Company- 
plan  to  do  with  its  advertising?     With  what  success  has  it  met? 

PROBLEM  QUESTIONS  —  CHAPTER  IV 

1.  In  the  Carnation  Milk  campaign  two  "slogans"  have 
been  largely  employed:  "The  Modern  Milkman,"  and  "From 
Contented  Cows."  Each  appeals  to  a  different  element  in  the 
market,  and  in  a  different  way.  Analyze  these,  and  compare 
them,  their  appeal,  and  their  possible  effects.  Do  you  think 
the  two  together  are  better  than  either  alone  would  have  been? 
Could  you  suggest  another  to  go  with  these,  making  a  new  appeal 
in  a  new  way,  and  working  in  harmony  with  the  rest  of  the  cam- 
paign as  outlined? 

2.  A  piano  company  recently  paid  an  eminent  pianist 
$80,000  to  use  their  piano  on  tour.  Would  you  call  him  an 
advertising  medium?  Was  the  special  tour  of  jobbers  to  the 
Carnation  eastern  plants  an  advertising  medium?  Can  you 
make  a  list  of  five  types  of  mediums  in  general  use  not  included 
in  the  Printers'  Ink  table  quoted?  Can  you  make  a  list  of  ten 
advertising  mediums  which  are  not,  but  which  might  be,  used 
in  advertising  a  grocery  specialty? 


CHAPTER  V 

ADVERTISING   AND    THE    CONSUMER 

THE  consumer  of  to-day  is  not  merely  an  individual  with 
a  need  which  he  seeks  to  have  filled  by  proffered  mer- 
chandise for  sale.  He  is  an  individual  with  a  need, 
plus  certain  more  or  less  well-formed  prejudices  about  his  need, 
plus  a  more  or  less  open  mind.  This  combination  of  needs, 
notions,  and  susceptibilities  is  the  central  object  of  attack  for 
all  advertising  aimed  at  the  sale  of  goods  consumed  at  retail. 

An  unsigned  article  in  Printers'  Ink  sets  forth  this  phase  of 
the  consumers'  position  as  follows: 

*In  1911  when  the  consumer  buys,  he  does  the  choosing.   He 

asserts  his  particular  individuality.       He  expresses  his  likes  or 

dislikes  down  to  the  most  subtle  differences.        He 

7%e       weighs   values    between   this   and  that   brand   of   a 

Consumer  similar  product.     He  discriminates,  he  wants  ivhat  he 

wants  —  and  he  gets  it. 

Advertising  has  made  this  choosing  possible  for  the  consumer. 
In  the  decades  past,  soap  was  soap.  Wheat  was  wheat. 
Coffee  was  coffee.  Paint  was  paint.  Razors  were  razors. 
When  the  periwigged  consumer  of  1811  wanted  soap,  he  went 
to  a  druggist's  —  or  was  it  an  apothecary?  —  and  mildly  asked 
for  and  accepted  a  cake  of  soap.  Perhaps  he  never  heard  of 
any  soap  but  what  was  rudely  made  at  home!  That  was  all. 
But  the  consumer  of  1911  knows  that  soap  is  no  longer  merely 
soap.  Advertising  has  taught  him  that  there  is  Pears'  "match- 
less for  the  complexion";  Williams'  "that  won't  smart  or  dry 
on  the  face";  "Ivory,"  "99.44  per  cent,  pure";  Packer's, 
Colgate's,  and  a  host  of  laundry  soaps.  Each  has  a  very  dis- 
tinct and  separate  value,  and  a  logical  but  specialized  appeal. 

The  modern  consumer  decides  whether  his  complexion  will 

*Printers    Ink,  January  26,   1911,  p.  59. 

89 


00  ADVERTISING  AS  A  BUSINESS  FORCE 

be  improved  by  Pears',  or  whether  Colgate's  will  do  it  more 
good.  Or  if  he  is  absent-minded,  and  apt  to  mislay  the  soap 
when  bathing,  he  will  buy  Ivory,  for  "it  floats,"  and  is  espe- 
cially adapted  to  the  use  of  absent-minded  persons.  And  his 
wife  will  decide  why  she  prefers  Swift's  Premium  to  Armour's 
Star,  Babbitt's  to  Fels-Naptha,  or  some  other  product.  Ad- 
vertising has  increased  the  number  of  soaps,  because  it  has 
made  possible  a  larger  exercise  of  the  consumer's  individuality. 

The  consumer  of  1811,  with  her  panniers  and  pompadour, 
bought  wheat  from  which  to  make  her  porridge.  But  wheat 
in  1911  is  no  longer  wheat.  We  are  living  in  the  beardless  age 
and  the  breakfast  food  era.  An  assortment  of  wheat  foods 
confronts  the  woman  of  to-day  which  would  make  her  ill  from 
indecision  if  she  were  not  the  well-poised  woman  that  she  is  — 
Maple  Flakes,  Shredded  Wheat,  Grape-Nuts,  Apetizo,  Egg- 
0-See,  Malta  Vita,  Cream  of  Wheat,  Pettijohn,  Ralston  —  and 
these  are  only  a  beginning! 

And  the  son  of  the  periwigged  consumer  of  1811,  did  he 
choose  his  make  of  razors  and  collars  and  suspenders  and  shot- 
guns? Odd's  Bodkins,  he  did  not!  He  was  lucky  to  get  any 
nameless,  nondescript  or  home-made  contrivance.  To-day 
his  great-grandsons  choose  in  just  what  manner,  shape  or  form 
they  will  be  shaved  or  shave  themselves,  selecting  from  among 
at  least  100  possible  choices. 

Not  only  has  advertising  enabled  the  consumer  to  have  a 
large  variety  from  which  to  select,  and  thus  express  his  indi- 
vidual taste,  but  it  has  educated  the  consumer  into  being  a  con- 
noisseur—  which  apt  word  means  "one  who  knows."  The 
modern  consumer  is  "one  who  knows."  Formerly  a  man  who 
was  called  a  connoisseur  was  one  in  a  thousand.  He  was  sup- 
posed to  know  more  than  his  fellows.  He  was  probably  rich, 
had  traveled,  and  was  an  authority  on  matters  of  art,  taste, 
food,  music.  When  his  friends  wished  to  make  important 
purchases,  they  came  to  him,  because  he  knew  more. 

But  to-day  advertising  tends  to  make  all  consumers  into  con- 
noisseurs. It  has  been  a  great  free  correspondence  school  in 
merchandise.  People  without  taste  have  been  edu- 
Aclvertistng  ^ated  into  taste  by  advertising  campaigns  in  fur- 
Consume7s  niture,  wall  coverings,  architecture,  clothes,  and   an 

Wants      endless  number  of  things.     Their  art  standards  are 

heightened  by  such  advertisers  of  pottery  as  the  Tecco 

and  the  Rockwood.      Piano-makers  have  informed  them  about 


ADVERTISING  AND  THE  CONSUMER  91 

tone  and  touch.  They  have  learned  scientific  facts  about  food 
values  (witness  the  strenuous  advertising  of  the  bean-canners 
the  Armour,  Swift,  and  Libby  concerns,  to  say  nothing  of  the, 
flour,  chocolate,  coffee,  biscuit,  and  endless  canned-goods  firms). 
They  have  the  best  art  brought  to  their  notice  by  the  Perry 
Pictures  and  the  Copley  Prints.  The  consumer  of  to-day 
is  his  own  connoisseur. 

It  is  this  quality  of  knowing  what  he  wants  and  why,  that  is 
the  best  safeguard  the  modern  advertising  manufacturer  has. 
If  an  advertiser  can  teach  a  consumer  strong,  mental  reason 
why  he  prefers  a  certain  product,  and  can  make  him  refuse  all 
substitutes,  that  advertiser  has  a  far  firmer  hold  on  his  trade 
than  any  other  manufacturer.  When  the  consumer  chooses 
for  himself,  and  has  established  his  individual  taste  for  a  certain 
brand  of  product  in  preference  to  all  others,  he  is  bound  to 
"take  no  substitute."  He  is  also  apt  to  become  a  permanent 
customer.     .     .     . 

The  Stetson  Shoe  Company  is  doing  something  good  along 
these  lines.  It  has  issued  a  booklet  on  "The  Right  to  Know" 
how  shoes  are  made,  showing  this  important 
^  ^"^^^-^  fact:  the  toughest  leather  is  down  the  spine  or 
Education  backbone  of  the  hide,  and  it  wears  longer  and  better 
than  leather  from  the  softer  outer  portions.  The 
Stetson  shoes,  it  is  explained,  are  made  of  this  part,  therefore 
give  better  wear  than  shoes  not  so  made.  If  you  want  a  well- 
wearing  shoe,  insist  on  getting  shoes  made  from  the  backbone 
leather.  Such  a  specific  argument  "bites"  and  develops  con- 
sumer individuality.  Consumers  are  expressing  their  indi- 
viduality in  the  most  minor  articles.  Take  toothbrushes.  The 
consumer  no  longer  buys  any  old  bristles  to  remove  the  unsani- 
tary fragments  from  his  molars,  but  purchases  a  prophylactic, 
or  a  special  design  of  some  sort. 

The  merchandising  plans  and  entire  distribution  organization 
are  being  affected  by  this  growing  consumer  individuality.  It  is 
going  to  be  the  big  thing  for  manufacturers  and  distributors 
to  take  account  of  more  and  more. 

THE    WILL    OF    THE   CONSUMER 

The  modern  consumer,  then,  it  should  be  clearly  realized  at 
the  start  of  any  discussion  of  his  place  in  the  distribution 
of  merchandise,  is  not  merely  a  combination  of  needs,  notions. 


92  ADVERTISING  AS  A  BUSINESS  FORCE 

and  susceptibilities,  but  he  is  a  combination  which  is  constantly 
changing  and  being  changed.  No  man  can  foretell  in  advance 
exactly  what  results  are  to  follow  from  any  given  appeal  to  this 
volatile  composite,  although  it  is  possible  to  know  beforehand 
pretty  definitely  what  the  general  nature  and  limits  of  those  re- 
sults are  to  be.  If  the  consumer  were  an  inert,  helpless  mass  it 
would  not  take  long  to  reduce  him  to  laws.  But  both  indi- 
vidually and  collectively  he  has  a  luill,  which  must  be  considered 
in  connection  with  any  appeal  to  him,  even  if  this  will  does  not 
become  the  main  object  of  attack.     And  this  wull  never  is  inert. 

At  the  meeting  of  the  American  Economic  Association,  in 
Washington  in  December,  1911,  Prof.  T.  N.  Carver,  of  Harvard 
University,  said: 

"It  would  be  an  interesting  and  illuminating  statistical 
investigation  if  we  could  count  and  tabulate  the  agencies  of 
'high  pressure  business.'  If  we  could  arrange  two 
chology  of  columns  of  figures,  one  giving  the  number  of  courses 
Attack  and  of  instruction  on  the  psychology  of  salesmanship,  the 
other  giving  the  number  on  the  psychology  of  resist- 
ing salesmanship;  one  giving  the  number  of  articles  in  busi- 
ness journals  on  how  to  make  sales,  or  how  to  get  orders, 
the  other  giving  the  number  on  how  to  avoid  buying  what 
you  don't  want,  or  how  to  avoid  giving  orders,  the  result 
would  be  illuminating.  We  should  probably  find  a  parallel  to 
Guizot's  famous  generalization  regarding  the  relative  efficiency 
at  different  historical  epochs  of  the  forces  of  attack  and  the 
forces  of  defence.  In  this  case  we  should  find  the  individual 
bent  on  defending  his  income  and  his  meagre  savings,  while  a 
great  array  of  forces  is  bent  on  attacking  them.  Just  as  gun- 
powder and  cannon  made  the  forces  of  attack  superior,  and 
changed  the  political  condition  of  Europe,  so  now,  wood-pulp 
paper,  cheap  advertising,  and  shrewd  salesmanship  are  making 
the  forces  of  attack  stronger." 

The  consumer  is  the  point  of  attack,  either  immediately 
or  ultimately,  in  every  advertising  campaign  for  advertising 


ADVERTISING  AND  THE  CONSUMER  93 

goods   finally    sold   at   retail.      And  while  we   are   discussing 
methods  of   attack,  is   it   not  well  to  take  stock  of  the  con- 
sumer's defence?     What  are  the  characteristics  of  the 
^^^    ,  consumer  as  a  class  which  meet,  and,  in  a  measure, 
Defences   ofiFset  advertising  and  selling  betterments  ?     Space  will 

not  let  us  catalogue  more  than  a  very  few : 
(1)  The  consumer's  spending  power  is  limited  by  his  earning 
ability.  He  may  develop,  or  have  stirred  in  him,  new  wants, 
strong  enough  to  make  him  work  harder  in  order  to  earn  more, 
but  he  cannot  honestly  spend  more  money  than  he  earns,  no 
matter  how  complicated  his  wants  may  become.  This  sets  a 
final  limit  on  consuming  capacity,  and  sets  a  limit  to  the  exer- 
cise of  his  will. 

("2)  The  strength  of  the  consumer's  savings  instinct  deter- 
mines the  margin  between  his  earning  power  and  his  willingness 
to  spend.  The  strength  of  this  instinct  is  only  relative  and 
here  the  consumer  is  vulnerable.     His  "will  to  save"  is  elastic. 

(3)  The  "standard  of  living,"  the  opinion  of  the  class  to 
which  the  consumer  belongs  as  to  what  may  be  expected  of 
him  in  the  spending  of  his  income,  has  its  constant  effect  on 
a  civilized  man's  conduct,  and  this  again  is  relative  and  open 
to  attack. 

(4)  Price  habits  have  tended  to  become  fixed  in  many 
lines  of  retail  business.  The  consumer  has  come  to  accept 
an  increasing  number  of  set  prices,  and  set  price  intervals. 
There  may  b3  a  few  places  in  this  country  where  a  man  expects 
to  find  a  necktie  line  regularly  carried  at  some  price  other  than 
50  cents  or  $1  or  upward,  but  they  are  few.  And  so  it  is 
with  suspenders,  shirts,  shoes,  sox  —  almost  everything  a  man 
wears  —  certain  price  habits  have  become  well  established. 
This  puts  competition  in  these  lines  on  a  basis  of  quality,  or 
service.  It  makes  purchase  easy  for  the  consumer,  but  it 
modifies  the  character  of  the  advertising  appeal,  as  we  shall 
see. 

(5)  Buying  habits  are  undergoing  modification  also.      And 


94         ADVERTISING  AS  A  BUSINESS  FORCE 

these  make  another  change  in  the  advertiser's  position.  With 
price  "higgling"  partly  eliminated,  and  the  whole  problem 
of  appeal  and  sale  based  on  quality  and  guaranteed  satisfaction, 
the  consumer  has  come  to  expect  that  goods  can  be  bought 
without  bargaining.  The  consumer  certainly  is  safer  in  his 
purchasing,  but  equally  certainly  he  is  more  careless. 

(6)  And  again  there  is  the  effect  of  the  multiplicity  of  ap- 
peals being  made  to  the  consumer.  The  individual  consumer 
and  the  consumer  as  a  class  is  appealed  to  from  so  many  sides 
that  the  effect  of  no  single  appeal  can  be  what  it  would  if  it 
stood  alone. 

To  sum  up  these  consumer  defences  we  find  that,  while  the 
consumer,  as  an  individual  or  as  a  class,  may  be  led,  stimulated, 
diverted,  directed  or  otherwise  influenced  in  buying,  there  are 
certain  roughly  ascertainable  limits  to  the  effects  which  may 
be  expected  to  follow  attacks  on  the  will  of  the  consumer. 
There  are  certain  limits  beyond  which  his  earning  power  will 
not  let  him  go,  there  are  others,  less  certain,  beyond  which  he 
will  not  buy  unless  his  saving  impulses  are  stifled,  there  are 
social  and  commercial  habit  barriers  to  consumer  diversion 
and  last  of  all,  the  appeals  to  the  consumer  may  partly  neu 
tralize  each  other  by  their  mere  multiplicity. 

Any  one  of  these  six  defences  viewed  from  the  advertiser's 
standpoint  would  show  elements  which  cannot  be  ignored 
with  safety  in  an  advertising  plan.  And  these  are  only  six 
out  of  an  innumerable  company  which  might  be  mentioned. 
But  these  will  serve  to  show  how  powerfully  runs  through 
advertising,  of  whatever  kind,  this  continuous  ebb  and  flow  of  the 
forces  of  appeal  and  resistance.  An  appeal  to  "buy  my  soap" 
must  be  much  more  than  a  pretty  picture  or  a  cordial  invitation, 
or  even  an  effective  appeal  to  reason.  It  must  take  account 
of  all  the  collateral  forces  at  work  on  the  soap  buyer  at  the  time 
when  he  buys  soap.  And  with  greater  or  less  elaboration  the 
same  thing  is  true  in  the  selling  of  real  estate,  or  books,  or 
anything  else. 


ADVERTISING  AND  THE  CONSUMER  95 

There  are  few  cases  in  which  the  resistive  power  of  inelastic 
income  and  the  savings  instinct  (in  this  case  working  in  com- 
bination)   are   better  illustrated  than  in  the  recent 
on  the     Encyclopaedia  Britannica  campaign.      Here  is  a  com- 
Savings    modity  for  which  every  man  with  an  interest  in  living 
affairs  has  at  least  a  vague  desire,  but  which  compar- 
atively few  would  normally  feel  they  could  afford.     The  great 
problem  was  to  make  a  fair  portion  of  the  possible  market 
feel  that,  income  and  savings  instinct  considered,  the  price  was 
not    prohibitive.     This    was    accomplished    in    a    remarkably 
clever  way.     The  price  was  split  up  into  sections  so  that  it 
looked  small.     It  was  then  explained  that  a  delay  in  purchasing 
meant  some  actual  money  loss,  due  to  a  necessary  indefinite 
price  increase  after  a  set  date.     And  the  price  obstacle  was 
attacked  indirectly  also,  by  treating  it  in  all  the  advertising 
as  if  it  were  negligible  detail  compared  with  the  value  of  the 
work  as  a  compilation  and  its  beauty  as  a  set  of  books.     The 
campaign  is  thus  described  by  Lynn  G.  Wright,  Managing 
Editor  of  Printers''  Ink: 

*Few  campaigns  carried  on  in  this  country  have 
demanded  more  pressing  activity  or  witnessed  a  more  successful 
working  out  of  plans  laid  necessarily  several  months  in  advance. 

Over  in  the  Cambridge  University  Press  offices  in  West 
32d  Street  the  pressure  was  terrific.  The  four-page  colored 
inserts  in  the  magazines,  the  trade-journal  copy  and  the  driving 
daily  paper  copy  running  frequently  to  full  pages,  set  inquiries 
in  motion  toward  the  publishers'  offices.     .     .     . 

Every  inquiry  demanded  an  answer  and  a  prolonged  follow- 
up.  The  slightest  show  of  interest  brought  upon  an  inquirer 
a  lengthy  procession  of  booklets,  prospectuses,  testimonials, 
statistics  and  authoritative  indorsements,  to  say  nothing  of 
hurry-up  letters  which  pictured  the  swift-approaching  date  of 
May  31st,  when  up  would  go  the  price  of  the  Encyclopaedia 
several  dollars  a  set. 

While  there  were  literally  miles  and  miles  of  advertising 
copy,  it  was  written  about  this  chief  "talking  point"  —  the 

^Printers'  Ink,  June  15,  1911,  p.  9. 


96  ADVERTISING  AS  A  BUSINESS  FORCE 

remarkably  smaller  size  of  this  edition  because  of  the  use  of 
thinner  paper.  In  as  many  varied  ways  as  copy  writers'  in- 
genuity could  devise,  the  point  was  made  that  the  separate 
volumes  could  be  held  easily  in  the  hand  and  could  be  taken 
to  the  fire  and  consulted  for  pleasure  as  well  as  information. 
The  wonderful  compactness  of  the  volumes  was  illustrated  by 
cuts  in  the  advertisements  and  by  window  displays  in  bookstore 
windows.  The  follow-up  literature  convinced  the  prospect 
of  the  wealth  of  contents  and  of  the  authoritativeness  of  the 
names  of  the  editorial  staff. 

And  again  that  recurrent  warning :  "Hurry!  After  May  31st 
you  will  have  to  pay  a  good  deal  more  for  these  books." 

It  was  explained  why  the  set  could  be  given  more  cheaply 
by  subscribing  before  May  31st: 

"The  reason  for  offering  special  prices  at  all  to  prompt  sub- 
scribers was  purely  a  material  one,  the  whole  situation  being 
governed  by  consideration  of  manufacture.  In  order  that  the 
manufacturing  may  be  completed  economically  and  rapidly 
it  is  essential  that  the  total  number  of  sets  for  the  first  dis- 
tribution shall  be  accurately  determined  by  the  last  day  of 
this  month,  and  then  all  of  the  remaining  copies  that  will  be 
required  to  execute  orders  registered  by  that  date  will  be  com- 
pleted as  one  continuous  operation  and  with  the  utmost  dispatch. 

"There  is,  indeed,  no  industry  in  which  the  economy  of  manu- 
facturing upon  a  large  scale  is  more  evident  than  it  is  in  the 
printing  and  binding  of  a  book,  and  manufacturing  upon  a 
large  scale  means,  in  this  case,  not  only  the  printing  of  a  large 
number  of  sheets  and  the  binding  of  many  thousands  of  volumes, 
but  also  the  printing  and  binding  of  this  large  number  without 
interruption.  All  whose  applications  are  posted  before  May  31st 
are  entitled  to  the  lowest  price,  because  their  orders,  being 
received  while  the  whole  machinery  of  production  is  still  in 
motion,  will  be  executed  as  a  part  of  an  unbroken  series  of 
operations." 

All  of  which  is  good  sense,  and  was  so  generally  recognized. 
But  the  first  few  months  brought  orders  only  in  driblets.  By 
the  middle  of  May  the  total  had  reached  about  20,000. 

The  advertiser  then  turned  on  more  "power."  Warning 
copy  was  hurried  to  the  dailies  of  all  the  larger  cities  of  the 
United  States.  Daily  reports  were  printed  of  the  number  of 
orders  received.  The  copy  took  on,  more  and  more,  those 
specific  new  features  that  are  known  to  be  good  action  pro- 


ADVERTISING  AND  THE  CONSUMER  97 

ducers.  May  31st  was  pressed  into  the  minds  of  millions  of 
readers  as  the  last  day  of  opportunity.  They  must  have 
dreamed  about  it  —  and  then  delayed  a  little  while  longer.  For 
the  real  action  did  not  begin  till  after  May  20  th.  On  May  18th 
23,000  applications  had  been  registered.  On  May  24th  these 
had  jumped  to  26,154  and  were  so  reported  in  the  advertising. 
"Only  seven  days  left"  a  60-point  John  Hancock  caption  flared. 

There  was  an  upheaval  in  the  United  States  mails  and  two 
days  sufficed  to  show  27,515  orders.  One  or  two  more  pressing 
invitations  to  act,  and  on  May  30th  29,790  names  were  enrolled 
on  the  order  books. 

On  the  morning  of  May  31st  the  last  ad  was  published.  In 
addition  to  the  forceful  reminder  carried,  it  included  a  facsimile 
Western  Union  telegraph  form,  so  prepared  that  it  needed  but 
little  more  than  the  sender's  signature  to  complete  the  order 
for  the  books.  Orders  not  mailed  or  telegraphed  before  the 
stroke  of  midnight  v/ould  not  be  booked. 

That  was  a  stirring  day  in  West  32d  Street.  Messenger  boys 
filed  into  the  Builders'  Exchange  building  in  a  stream.  The 
bags  of  the  letter  carriers  grew  more  plethoric  with  each  delivery. 
The  order  clerks  in  the  Britannica  offices  on  the  tenth  floor 
forgot  their  lunch  in  their  vain  endeavors  to  keep  the  stacks 
of  letters  and  telegrams  from  toppling.  Oliver  McKee,  the 
English  sales  manager  in  charge,  came  near  to  uttering  an 
exclamation,  so  near  did  he  come  to  losing  his  reserve,  as  his 
excited  assistant  reported  the  doings.  One  of  the  final  orders 
was  from  a  corporation  head  who  asked  for  fourteen  sets,  one 
for  his  yacht,  one  for  his  home,  and  the  rest  for  his  executives. 

Two  days  later  the  checkers  were  able  to  make  a  close  approxi- 
mation of  the  total  bookings.  Orders  ran  to  over  32,000  sets  — 
increase  of  nearly  three  thousand  in  a  single  day.  Advertising 
did  it;  30,000  lines  were  used  in  the  newspapers.  Over  $75,000 
was  spent  in  the  last  thirty  days.     .     .     . 

The  results  described  as  coming  from  this  campaign  were 

clearly  achieved  mainly  by  attack  on  the  savings  instinct.    Few 

.     campaigns  illustrate  this  so  clearly.     But  the  same 

the       principles  figure   largely   in   the   sale   of   nearly   all 


r.. 


'o^?ner'5  articles  involving   a   large   initial   outlay.      Talking 
machines,  piano  players,  and  automobiles  are  note- 
worthy examples  of  commodities  of  this  type. 


98  ADVERTISING  AS  A  BUSINESS  FORCE 

Attacks  on  "standards  of  living"  shade  ofiF  from  these  ahnost 
imperceptibly.  These  often  take  the  form  of  attempts  to  get 
people  to  buy  more  than  enough  to  satisfy  their  normal  wants. 
This  type  of  appeal  and  some  of  the  methods  employed  in 
making  it  are  thus  described  by  Waldo  P.  Warren : 

*Did  you  ever  go  into  a  haberdasher's  store  to  buy  a  box  of 
collars  and  come  out  the  possessor  of  four  shirts,  three  cravats, 
several  suits  of  underwear,  and  a  sporty  vest.-* 

If  so,  you  came  in  contact  with  one  of  the  biggest  principles 
of  business  promotion  —  the  principle  of  getting  people  to  buy 
more. 

And  if  you  observed  carefully  the  methods  of  the  salesman 
who  waited  on  you,  you  caught  a  glimpse  of  how  it  was  done. 
But  the  chances  are  you  didn't  realize  at  the  time  that  you 
were  dealing  with  a  conscious  artist  —  you  thought  you  were 
doing  it  of  your  own  free  will.  You  were,  in  fact,  and  right 
there's  where  the  art  of  the  salesman  comes  in. 

The  principle  and  the  effect  are  the  same  when  applied  to 
advertising. 

The  salesman  does  it  by  assuming  that  you  came  in  to  buy 
more  than  that  box  of  collars.  He  didn't  limit  his  opportunity 
by  thinking  of  you  as  a  "collar  customer."  He  assumed  that 
you  were  in  a  buying  frame  of  mind,  and  that  collars  were  your 
starting  point.  You  found  that  he  had  a  better  opinion  of  you 
than  you  had  of  yourself,  and  you  instinctively  responded  to  it, 
and  were  unwilling  to  admit  that  you  were  not  as  good  a  spender 
as  he  thought  you  were. 

The  manufacturers  of  men's  clothing  recognize  the  great 
power  that  lies  with  the  retail  salesman,  not  only  to  sell  their 
goods,  but  to  sell  more  of  them.  One  of  the  big  clothing  manu- 
facturers of  Rochester  inculcates  the  idea,  not  only  in  its 
advertisements,  but  through  its  dealers  to  the  actual  working 
policy  of  the  retail  salesman,  that  a  man  gets  better  wear  out 
of  two  suits  at  $25  each  than  he  will  out  of  one  tailor-made  suit 
at  $50  or  one  of  the  higher-priced  ready-to-wear  suit^. 

A  handkerchief  manufacturer  finds  that  the  man  who 
dropped  in  to  buy  one  handkerchief,  because  he  had  left  home 
without  one,  will  just  as  readily  buy    tliree  if  he  finds  they 


"Printers  Ink,  November  16,  1911,  p.  32. 


ADVERTISING  AND  THE  CONSUMER  99 

come  also  in  packages  of  three  at  even  money.  And  the 
advertising  prepares  him  for  the  transaction  by  mentioning 
the  various  packages  containing  one,  two,  and  three  hand- 
kerchiefs each. 

The  manufacturer  of  3-in-One  Oil  "gets  people  to  buy  more" 
by  putting  the  oil  up  in  a  bigger  bottle,  and  giving  more  oil 
for  the  same  money  than  in  the  smaller  package.  The  desire 
to  buy  at  the  best  price  is  instinctive,  and  when  a  larger  sale 
can  be  made  in  one  transaction  it  is  often  possible  to  utilize 
this  instinct,  even  when  the  bargain  does  not  come  out  of  the 
manufacturer  at  all,  but  out  of  the  possible  profit  of  the  dealer 
on  two  sales  instead  of  one. 

A  well-known  mail-order  house  in  western  New  York  has 
made  a  gigantic  success  with  the  principle  of  getting  people 
to  buy  more.  By  offering  premiums  for  club  orders  the  mail- 
order house  gets  a  great  deal  of  extra  business  —  ordinary 
household  articles  that  otherwise  would  be  bought  at  the  grocery 
store,  but  put  in  with  the  order  to  make  it  amount  to  ten 
dollars. 

The  "assortment  idea"  is  by  no  means  a  new  one,  and  is  the 

avowed  secret  of  the  success  of  many  great  enterprises.     Butler 

Brothers,  perhaps,  represent  the  conspicuous  maximum  effect 

of  the  application  of  that  idea.     Their  first  stock,  based  on  this 

idea,  was  so  small  that  it  is  said  they  had  to  pile  up  empty 

packing  cases    halfway  back    in  a  twenty-foot  storeroom    to 

make  the  place  look  full  enough.     But  the  "assortment  idea" 

was  there,  and  people  "bought  more"  than  if  each  item  had 

been  offered  individually.     To-day  the  largest  warehouses  in 

six  cities,  and  perhaps  the  largest  list  of  dealers  ever  reached 

by  one  concern,  attest  the  value  of  the  plan.     The  plan,  plus, 

of  course,  but  nevertheless  the  plan  —  "getting  people  to  buy 

more."     .     .     . 

.* 

And  this  attack  on  standards  of  living  is  not  merely  a  matter 

of  increasing  the  wants.     It  involves,  in  many  cases,  problems 

Refinina   ^^   refining  wants  already   existing.      To  get  people 

Existing   to  buy  a  better  grade  of  goods,  pay  full  price  for  it, 

""  ^     and  be  satisfied  with  their  purchase  is  merely  another 

way  of  attacking  them  through  their  "standards  of  living." 

The  writer  just  quoted  (Waldo  P.  Warren)  calls  this  "Getting 

People  To  Pay  More."     Concerning  this  he  says: 


100        ADVERTISING  AS  A  BUSINESS  FORCE 

*As  a  past  master  of  the  art  of  "  getting  people  to  pay  more  " 
I  think  no  one  who  knows  would  dispute  the  claim  of  Marshall 
Field.  I  do  not  mean  paying  more  for  a  given  quality  but 
appreciating  a  better  quality  and  paying  what  it  is  worth. 
The  day  has  passed  when  "getting  people  to  pay  more"  for 
a  given  quality  is  regarded  as  a  virtue,  or  even  as  a  good  business 
principle.  The  whole  tendency  of  experience  is  to  demonstrate 
that  value  giving  is  the  only  sure  highway  to  success. 

Marshall  Field  had  a  maxim,  which  in  his  quiet  way  he 
dropped  more  than  once  in  those  casual  conversations  with 
executives  and  department  chiefs,  and  by  which  means  he 
succeeded  in  so  infusing  his  spirit  into  the  personnel  of  a  vast 
organization  that  it  would  go  the  way  he  desired  it  to  go  while 
he  enjoyed  a  six  months'  holiday  in  Eiirope.  That  maxim 
was:  "The  appreciation  of  quality  remains  long  after  the 
price  is  forgotten." 

I  have  heard  it  quoted  many  a  time  by  various  department 
chiefs  with  whom  it  was  formerly  my  pleasure  and  privilege 
to  come  in  contact,  and  quoted  with  all  the  finality  with  which 
a  religious  zealot  points  to  his  "proof  text"  of  Scripture,  in 
explanation  or  justification  of  a  merchandising  or  advertising 
policy. 

One  day  in  particular  I  remember  standing  by  the  counter 
where  women's  shopping  bags  were  displayed,  and  falling  into 
a  conversation  with  the  department  chief  whose  simple  juris- 
diction included  those  articles.  A  new  stock  had  just  been 
put  in  and  he  was  taking  a  justifiable  pride  in  showing  me  what 
exquisite  creations  were  included  in  the  display.  Some  of 
them  were  marked  at  $50,  $60,  $75,  etc.,  and  from  that  on  down 
to  $5.  (Notice  I  did  not  say  $49.95,  etc.)  I  said  to  him: 
"Do  you  have  much  trouble  in  disposing  of  bags  at  that  price.? " 

"We're  not  very  anxious  to  dispose  of  them  (it  all,"  he  replied. 
"You  see  it  is  well  worth  while  to  carry  those  bags  in  the  case 
even  if  we  never  sold  them.  Of  course  we  do  sell  them  occa- 
sionally, but  they're  worth  more  to  us  if  we  keep  them." 

"Why,  how's  that.?"  I  asked  — that  was  before  I  had  learned 
much  about  the  psychology  of  merchandise  displays. 

"Well,  you  see,  a  man  will  come  in  here  to  buy  a  bag  for  his 
wife,  or  she  will  come  herself  for  that  matter,  and  have  in  mind 
paying  $5  or  $10  dollars.  But  when  they  look  over  the  assort- 
ment  and  see  that,  while  they  can  get  a  fine-looking  bag  for 
*  Printers   Ink,  December  28,  1911,  p.  36. 


ADVERTISING  AND  THE  CONSUMER         101 

that  money,  there  are  others  on  up  to  several  times  that  sum, 
it  simply  lifts  their  conception  of  what  constitutes  a  desirable 
shopping  bag,  and  they  end  up  by  paying  $25  or  $30.  The 
more  expensive  bags  haven't  been  sold,  and  yet  they  have 
earned  half  their  cost  on  that  one  transaction  —  at  least  one 
of  them  has. 

"Then,"  he  went  on,  "that  woman  goes  out  with  her  fine 
bag  and  sets  a  new  standard  for  her  friends,  and  they  come 
in  with  $20  ideas  and  may  end  up  with  $40  purchases." 

"Do  you  think  that  is  quite  fair  to  the  publicf*"  I  asked,  as 
personal  recollections  of  the  monthly  "Field  bill"  came  to  my 
mind,  and  I  remembered  a  remark  I  had  often  heard  in  expla- 
nation, "Things  cost  so  much  more  than  you  think  they  are 
going  to." 

"Why  not.f*"  he  asked,  as  if  his  personal  ethics  had  been 
questioned.  "They  got  good  value;  they  got  what  they  chose; 
they  had  the  whole  assortment  to  choose  from.  They  could 
have  bought  a  good  bag  for  $5  or  $10,  but  they  preferred  to 
pay  more.  Why  should  I  limit  them  to  cheaper  bags  if  they 
prefer  to  pay  for  something  better?  " 

The  argument  ended  with  the  proof -text  maxim,  "Mr.  Field 
says,  you  know,  that  'The  appreciation  of  quality  remains  long 
after  the  price  is  forgotten.' " 

I  have  since  had  occasion  to  observe  how  the  same  principle 
works  in  other  lines  of  trade,  and  also  how  the  same  effect  is 
secured  by  other  methods. 

One  of  the  higher-priced  makes  of  automobiles  is  marketed 
by  men  who  have  discovered  that  there  are  many  persons  who 
demand  and  are  willing  to  pay  for  the  best  that  can  be  produced. 
Let  others  stint  their  product  in  materials,  proportions,  and 
finishings  —  but  why  compete  with  them  when  there  are  enough 
who  are  willing  to  pay  for  an  unstinted  production.  And  yet 
the  problem  remains  of  selling  the  intangible  margin  of  differ- 
ence, something  that  even  appearance  does  not  always  show. 
It  is  done  not  by  arguing  superior  utility,  but  by  investing  the 
car  with  a  prestige  or  "halo"  which  irresistibly  connotes  more 
refined  taste  in  the  owner,  and  human  nature,  when  it  can  afford 
the  difference,  does  the  rest. 

Fortunately  for  many  propositions  where  it  is  necessary 
to  ask  a  higher  price  it  is  possible  for  them  to  demonstrate 
an  actual  economy,  and  then  the  problem  is  easy.  When  the 
"Twentieth  Century  Limited"  between  New  York  and  Chicago 


102        ADVERTISING  AS  A  BUSINESS  FORCE 

can  point  to  the  saving  of  a  business  day,  which  to  many 
business  men  means  hundreds  of  dollars,  the  question  of  whether 
or  not  it  is  worth  while  paying  $10  extra  fare  vanishes  into 
thin  air. 

Even  in  the  matter  of  prunes  a  leading  New  York  grocer 
has  demonstrated  that  a  pound  of  large  prunes  at  fifteen  cents 
is  better  value  than  a  pound  of  small  prunes  at  ten  cents,  when 
the  seeds  are  weighed  separately  from  the  fruit.  It  has  been 
found  possible  to  demonstrate  this  point  to  many  of  the  most 
frugal  of  housewives,  so  that  the  fine  large  fifteen-cent  prunes 
no  longer  suffer  in  competition  with  the  ten-cent  grades,     .     .     . 

Utilizing  existing  reputation,  as  a  means  of  getting  people  to 
pay  more,  is  exemplified  in  the  phonograph  business.  Records 
for  a  long  time  were  sold  at  a  standard  price  of  35  cents 
and  25  cents,  but  it  was  found  possible  by  drawing  on  the 
existing  reputations  of  great  singers  to  market  records  at  $7 
each. 

Of  course  there  is  a  real  difference  in  the  quality  of  the  music, 
and  yet  there  are  doubtless  many  purchasers  who  have  more 
feigned  than  actual  ability  to  appreciate  the  full  difference  — 
the  reputation  gets  the  benefit  of  the  doubt.  The  reputation, 
and  the  price  of  the  records  in  consequence,  is  often  due,  how- 
ever, to  rivalry  between  impresarios,  rather  than  to  extra- 
ordinary merit  of  the  vocalists.  But  the  public  pay  for  it, 
and  count  the  values  satisfactory,  because  the  consciousness 
of  rubbing  off  glory  from  reputation  is  quite  a  tangible  com- 
modity of  commerce.     .     ,     . 


We   all   know   that  the   "buying  habits"  of  the  consumer 

have  changed  within  a  generation  and  that  they  are  changing 

constantly.      But  the  extent  of  their    changes    we 
Trying  to  i        t     i 

Change    g^asp  only  dmily. 

Bvying  We  all  know,  for  instance,  that  the  "ready-made" 
idea  no  longer  needs  to  defend  itself  in  the  shoe  busi- 
ness. But  is  the  same  thing  true  of  the  clothing  business  — 
either  for  men  or  women?  There  is  a  sharp  struggle  on  in  the 
sale  of  men's  clothing.  Attempts  are  being  made  to  change 
men's  habits  of  buying  these  lines.  But  is  the  tailor  as  help- 
less as  the  shoemaker  was  in  his  dav,  and  has  the  consumer 


ADVERTISING  AND  THE  CONSUMER         103 

nothing  in  his  make-up  to  which  the  tailor  can  appeal,  or  with 
which  he  himself  can  oppose  the  seductions  of  the  clothing  manu- 
facturer? 

Some  significant  features  of  this  struggle  over  the  consumer's 
methods  of  buying  clothes  are  brought  out  in  the  following 
description,  by  A.  Rowden  King,  of  three  campaigns  conducted 
by  makers  of  trade-marked  woolens  for  the  purpose  of  counter- 
acting ready-made  clothing  appeals: 

*An  official  prominent  in  organized  merchant  tailoring  a  year 
or  two  ago  admitted  that  the  ready-made  clothing  advertisers 
were  greatly  depleting  the  merchant-tailoring  business  — 
threatening  its  very  life,  in  fact.  Another  bitterly  complained 
that  the  advertised  vogue  of  trade-marked  suits  was  reducing 
many  merchant  tailors  to  mere  "pants  pressers." 

Only  a  few  saw  deep  into  the  interior  causes,  and  put  their 
fingers  on  the  weak  spot  —  the  fact  that  the  manufacturers 
and  importers  of  woolens  had  no  standing  or  identity  with 
consumers  and  were  not  backing  up  the  merchant  tailors  as  the 
ready-made  clothing  houses  were  backing  up  retail  clothiers. 
The  praises  of  ready-made  clothing  have  been  sung  to  con- 
sumers to  the  tune  of  a  million  dollars  yearly,  in  various  adver- 
tising efforts,  for  the  last  six  or  eight  years.  It  was  bound  to 
come  about  that  the  public  be  won  to  the  ready-made  idea.    .    .    . 

A  considerable  number  of  successes  in  advertising  trade- 
marked  fabrics  for  woviens  wear  have  occurred  in  the  past 
few  years,  and  an  analogy  was  bound  to  occur  in  the  men's 
field.  To-day  there  are  three  woolen  houses  .  .  .  adver- 
tising to  the  consumer. 

The  fact  that  at  least  one  of  these  advertisers  of  men's 
woolens  has  been  compelled  to  increase  his  output  50  per  cent, 
in  order  to  meet  the  growing  demand  which  has  developed 
since  his  advertising  began  a  season  or  two  ago  is  evidence 
enough  of  the  possibilities. 

The  ready-to-wear  tailors  seek  to  condemn  the  whole  propo- 
sition in  advance  by  saying:  "Well,  it  is  difficult  enough 
for  the  average  man  to  find  a  fabric  with  design  and  texture 
to  suit  him,  let  alone  concerning  himself  with  what  mill  made 
it."     But  inwardly,  without  a  doubt,  these  same  tailors  see 

*Printers   Ink,  October  6,  1910,  p.  35. 


104        ADVERTISING  AS  A  BUSINESS  FORCE 

iu  this  new  advertising  a  serious  competitor  for  tlie  great  volume 
of  clothing  sales. 

The  three  pioneers  in  this  field  to-day  are  J.  R.  Keim  &  Co., 
Philadelphia,  making  Shackamaxon  Guaranteed  Fabrics; 
S.  Stein  &  Co.,  New  York,  selling  Stein  Woolens;  and  W.  P. 
Willis  &  Co.,  New  York,  importing  Willis  Woolens.  These 
are  all  old-established  houses  doing  their  first  consumer  adver- 
tising. In  addition,  there  are  rumors  of  other  highly  reputable 
houses,  one  of  which  has  been  in  the  business  without  using 
advertising  for  upward  of  forty  years,  turning  to  this  method 
of  marketing  their  goods. 

The  50  per  cent,  increase  referred  to  above  was  in  the  case 

of  Shackamaxon.     J.  R.  Keim  &  Co.  make  their  own 

The  His-  woolens  at  their  own   mills,  which  are    among    the 

Shacka-    ^^^''gGst.      Their   selling   proposition    is   to-day    still 

maxon  another  case  of  "  Our-trade- mark-stamped -on -the - 
selvage-  guarantees  -you. ' ' 

The  "Shackamaxon"  advertising  is  now"  in  its  second 
season.  The  selling  idea  back  of  it  is  unique  and  comprehen- 
sive. The  purpose  is  to  make  it  possible  for  the  merchant 
tailor  to  absolutely  guarantee  the  garments  w^hich  he  puts 
out.  When  his  garments  are  made  of  Shackamaxon,  the 
latter  is  guaranteed  to  give  absolute  satisfaction  as  long 
as  it  lasts.  This  is  the  Keim  &  Co.  guarantee:  "If  any  suit 
made  of  Shackamaxon  fabric  shrinks  or  fades,  or  if  any  fault 
develops  in  the  fabric — no  matter  how  long  you  have  worn  it — 
we  will  pay  for  another  suit."  Then,  to  this  guarantee  as  to 
the  goods,  the  tailor  himself  adds  his  personal  guarantee  con- 
cerning the  fit  and  workmanship. 

Shackamaxon  is  handled  exclusively  by  merchant  tailors. 
This  makes  it  possible  to  effect  much  co-operation  with  the 
latter.  Booklets,  follow-up  letters,  electros  for  local  news- 
paper advertising,  window  cards,  and  many  other  helps  are 
freely  given  to  every  tailor  who  handles  these  fabrics. 

The  campaigns  are  also  intended  to  overcome  the  idea  which 
prevails  in  the  minds  of  the  patrons  of  many  merchant  tailors, 
that  imported  goods  are  superior  to  goods  of  American  manufac- 
ture. Considerable  argument  is  made  of  the  fact  that  the 
Shackamaxon  method  is  an  economical  one,  being  unique  in 
that  it  necessitates  no  middlemen  and  middlemen's  expenses 
between  mill  and  tailor.  Emphasis  is  put  upon  the  methods 
and  care  of  manufacture  and  upon  the  great  multiplicity  of 


ADVERTISING  AND  THE  CONSUMER         105 

patterns,  it  being  claimed  that  more  than  4,000  styles  of 
worsteds,  cheviots,  and  serges,  in  every  kind  of  coloring  and  de- 
sign, are  made  every  year. 

The  F.  Wallis  Armstrong  Company,  Philadelphia,  which  is 
to  the  agency  handling  the  Shackamaxon  advertising,  has  gone 
particular  pains  to  show  up  the  goods  in  the  illustrations  used. 
Both  the  ads  and  the  booklets  carry  remarkably  good  repro- 
ductions of  the  woolens,  thus  giving  a  very  definite  idea  of  how 
the  latter  really  look.  The  cover  of  the  fall  and  winter  booklet, 
which  is  supplied  to  the  tailors  with  their  imprints,  is  especially 
good  in  this  respect. 

The  trade  is  being  reached  by  all  the  important  tailor  pub- 
lications, such  as  the  Sartorial  Art  Journal,  the  American 
Gentleman,  and  Admticed  Fashions.  The  consumer  is  being 
reached  through  a  list  of  publications  which  covers  most  of  the 
leading  magazines  with  national  circulation.  Tlie  watchword 
of  the  Shackamaxon  campaign  against  the  ready-made  manufac- 
turers is:  "A  suit  intended  to  fit  you  should  be  cut  to  your 
individual  measurements  and  fitted  to  you  in  the  making." 

The   Stein   Woolens   proposition   is  of  about  the  same  age 

as  the  Shackamaxon  proposition  from  an  advertising 

^Wooim'  Standpoint.     The  firm  of  S.  Stein  &  Co.  is  one  of  the 

Campaign  oldest  in  the  business,  being  established  in  1864,  and 

being   well    known   to   the  trade   and  to   a  host  of 

consumers. 

The  Stein  plan  calls  for  even  more  co-operation  with  the 
tailors,  perhaps,  than  the  Shackamaxon  plan.  A  complete 
department  has  been  organized  under  the  direction  of  Victor 
Leonard,  the  advertising  manager  (formerly  with  Kenyon 
&  Co.),  to  promulgate  plans  to  aid  the  merchant  tailors  who  use 
Stein  Woolens  to  do  a  larger  business. 

These  selling  plans  are  cut  to  the  tailor's  business  measure 
by  Mr.  Leonard  quite  the  same  as  the  tailor,  in  turn,  cuts  Stein 
Woolens  to  his  patron's  measure.  "It  is  a  very  different  propo- 
sition as  a  little  reflection  must  show,"  explains  Mr.  Leonard, 
"  to  work  out  a  retail  selling  plan  for  a  tailor  who  makes  suits 
which  sell  at  $25  to  $35  and  for  another  tailor  who  makes  suits 
for  $50  and  up."  Plans  are  suggested  for  window  display,  for 
local  advertising,  and  for  follow-ups  through  the  mails,  etc. 
Tailors  are  provided  with  folders  of  original  design,  booklets, 
and  letters. 

The  Stein  Woolens  selling  plan  makes  it  possible  for  a  tailor 


106        ADVERTISING  AS  A  BUSINESS  FORCE 

to  be  entirely  exclusive.  Not  more  than  one  tailor  in  a  place 
is  sold,  unless  his  locality  is  large  enough  to  warrant  it  without 
question.  And  even  then  not  more  than  one  or  two  suit  lengths 
of  fabric  are  sent  to  each  locality. 

The  motif  of  the  Stein  advertising  is  summed  up  in  the 
following  argument:  "The  same  instinct  that  causes  you  to 
prefer  an  original  painting  to  a  lithographed  reproduction  also 
causes  you  to  prefer  merchant-tailor  clothes.     .     .     ." 

The  firm  of  W.  P.  Willis  &  Co.,  New  York,  which  completes 

the  present  triumvirate  of  men's  woolen  advertisers,  has  also 

been  in  the   business  for  a   long  time.     Feeling  the 

iww    ^J^^oads  of  the  ready-to-wear  clothiers,  it  is  now  test- 

&  Co^  ^^S  its  advertising  wings  for  the  first  time.  It  was 
established  forty-two  years  ago.  It  imports  high- 
grade  fabrics  for  distribution  among  the  high-grade  merchant 
tailors  in  this  country.  For  this  reason  the  Willis  advertising 
is  necessarily  different  from  the  Shackamaxon  and  Stein 
advertising,  which  is  in  the  interests  of  the  products. 

An  official  of  the  firm  explains  the  Willis  viewpoint  as  follows : 
"The  man  who  pays  more  than  $50  for  a  suit  of  clothes  or  an 
overcoat  is  entitled  to  an  imported  fabric.  The  highest  grade 
custom  tailors,  who  never  command  less  than  this  price  for  any 
garment,  have  always  made  it  their  practice  to  submit  to  their 
clients  only  cloths  that  come  from  Europe.  There  are  many 
custom  tailors,  however,  who,  because  of  local  conditions,  find 
it  impossible  to  confine  their  business  exclusively  to  the  making 
of  garments  of  the  highest  grade.  It  is  to  assist  them,  as  much 
as  possible,  that  we  have  dwelt  entirely  upon  that  branch  of 
their  business  in  our  advertising.  We  believe  that  by  identi- 
fying our  imported  merchandise  with  advertising,  we  will  give 
to  the  merchant  tailors  of  the  country  a  new  argument  and 
an  active  selling  force  in  their  business." 

As  a  means  of  identification,  Willis  &  Co.  stamp  every  yard 
of  their  importations  with  their  trade-mark,  and  all  the  advertis- 
ing and  literature  emphasize  the  fact  that  this  mark  is  only 
to  be  found  on  imported  goods.  At  the  same  time  that  the 
Willis  advertising  will  materially  help  the  tailor  who  charges 
$50  and  upward,  it  will  also  help  all  custom  tailors,  even  those 
who  make  $25,  $30,  and  $35  garments,  inasmuch  as  it  booms 
the  custom  business  generally  like  the  Shackamaxon  and 
Stein  advertising.     .     .     . 

This  little  trio  of  woolen  advertisers  is  bound,  in  the  near 


ADVERTISING  AND  THE  CONSUMER         107 

future,  to  be  augmented  by  others,  for  there  is  a  large  unex- 
ploited  field  of  argument  in  individual  service  and  sponsored 
fabrics.  We  shall  soon  see  a  competitive  advertising  struggle 
between  these  two  distinct  divisions  of  tailoring.  All  of  which 
is  as  it  ought  to  be,  for  ready-made  clothing  has  had  too  easy 
a  path  to  success. 

To  this  list  of  three  woolen  manufacturers  appealing  to  the 
consumer  to  change  back  again  to  the  clothes-buying  methods 
of  twenty  years  ago  others  have  since  been  added.  Notable 
among  these  is  the  American  Woolen  Company. 

These  cases,  in  turn,  have  been  accompanied  by  a  third  type 
of  appeal  to  the  wearer  of  men's  clothing.  This  appeal  comes 
from  the  manufacturing  tailor  who  takes  individual  measure- 
ments through  local  agents  and  then  makes  the  clothes  under 
factory  conditions  in  a  central  plant.  He  is  thus  able  to 
perform  the  merchant  tailor's  service,  while  he  secures  most  of 
the  clothing  manufacturer's  savings  in  production  cost. 

The  multiplying  of  advertising  attacks  produces  a  chain  of 

troubles,   the  chief  among  which  are  distributive.     If  an  adver- 

The  Inter-  ^^^^^  '^^  ^^  fortunate  as  to  occupy  a  field  in  which  he  has 

ference  of  a  maintainable  monopoly,  he  can  feel  reasonably  sure 

Attadcs^^  that  his  results  will  at  least  roughly  approximate  a 
vntk  Each  definite  relation  to  the  skill  with  which  his  cam- 
paign  has  been  planned  and  executed.  Otherwise, 
after  his  skill  and  ingenuity  have  done  their  best  his  results 
will  depend  very  largely  on  what  his  competitors  may  do. 
And  for  this  there  is  no  visible  cure  in  any  appeal  to  the  con- 
sumer. This  is  a  problem  quite  as  much  in  the  province 
of  the  sales  manager  as  of  the  head  of  the  advertising  depart- 
ment. It  brings  us  back  to  our  original  theme  —  the  inter- 
relation of  advertising  and  selling  activities. 
Is  There  a       H.  M.  Horr,  Advertising  Manager  of  the  Oakland 

Cure  for  Chemical  Company  (Dioxygen),  New  York,  discusses 
Subsiuutwn?  ^j^jg  problem,  and  suggests  a  possible  remedy  under 
the  caption,  "Is  There  a  Cure  for  Substitution?" 


108        ADVERTISING  AS  A  BUSINESS  FORCE 

*From  the  point  of  view  of  the  advertiser,  substitution  in- 
cludes any  and  every  method  of  diverting  demand  created  for 
the  product  advertised. 

The  dealer,  on  the  contrary,  very  often  takes  a  decidedly 
different  attitude.  He  says  that  substitution  means  substitut- 
ing one  article  for  another  without  the  knoivledge  or  consent  oj 
the  customer.  He  classes  all  other  attempts  to  divert  demand 
as  salesmanship. 

If  the  dealer  is  right  in  his  definition,  then  few  dealers  make 
a  practice  of  substitution;  if  the  advertiser  is  right  in  his  defini- 
tion, then  substitution  is  one  of  the  worst  obstacles  confronting 
the  present-day  advertiser.  Let  the  dealer's  definition  stand 
and  still  the  advertiser  must  contend  against  the  widespread 
attempt  on  the  part  of  the  dealer  to  divert  demand  through 
what  he  calls  "salesmanship." 

How  is  the  advertiser  going  to  successfully  meet  this  situa- 
tion.^ That  it  is  a  question  of  very  great  importance  is  evi- 
denced by  the  amount  of  space  now  being  devoted  b}^  many 
advertisers  to  anti-substitution  or  "anti-dealers-salesmanship" 
copy. 

In  the  drug  field  alone  we  have  Horlick's  Malted  Milk,  with 
their  "the  only  original  —  the  only  genuine"  copy;  Vaseline, 
with  their  copy  aimed  at  ordinary  petroleum  jellies  of  all  kinds; 
Dioxygen,  with  their  "greater  strength  and  purity"  arguments 
as  compared  with  ordinary  "hair-bleaching,"  peroxide;  Pond's 
Extract  with  their  copy  educating  the  public  on  ''why  Pond's 
Extract  instead  of  ordinary  witch  hazel,"  etc.,  etc. 

These  advertisers  and  many  others  realize  that  they  cannot 
get  the  full  benefits  from  creative  advertising  because  of  the 
activity  of  the  retail  dealer  in  diverting  the  demand  their 
advertising  creates.  The  same  situation  exists  in  every  line 
of  business.  Every  advertiser,  except  the  strictly  mail-order 
advertiser,  suffers  from  trade  diverting  "salesmanship." 

Advertisers  estimate  their  loss  of  business  from  this  source 
at  anywhere  from  10  per  cent,  to  75  per  cent.,  and  the  worst 
of  it  is  the  dealer  believes  he  is  justified  in  his  attitude. 

If  any  individual  advertiser,  to  protect  his  business,  uses  any 
part  of  his  advertising  space  to  warn  the  public  against  "sub- 
stitutions," the  dealer  at  once  takes  offence;  he  is  more  aggres- 
sively antagonistic  than  ever,  and  the  advertiser  loses  as  much 


*Printers  Ink,  February  16,  1911,  p.  22. 


ADVERTISING  AND  THE  CONSUMER         109 

as  he  gains.  Why  did  the  magazines  give  up  their  joint  "anti- 
substitution"  campaign  of  a  few  years  ago?  Simply  because 
they  got  cold  feet;  they  were  arousing  "too  much  antagonism" 
in  the  retail  trade. 

The  situation  grows  worse  instead  of  better,  and  why? 
Simply  because  under  existing  conditions  the  balance  of  power 
is  with  the  distributor.  No  one  manufacturer  is  strong  enough 
to  make  a  winning  fight  against  the  odds  he  has  to  face.  True, 
many  advertisers  are  successful  in  spite  of  existing  conditions, 
but  how  much  more  successful  would  these  same  advertisers 
be,  and  how  many  unsuccessful  advertisers  would  become 
successful  ones,  if  this  one  big  obstacle  could  be  entirely  re- 
moved? 

Is  there  any  cure  ?  Suppose  fifty  national  advertisers  would 
annually  subscribe  $5,000  each  to  a  common  fund  to  be  devoted 
to  educating  the  public?  Suppose  this  $250,000  appropriation 
should  be  devoted  to  advertising  the  quality,  dependability, 
and  reliability  of  all  nationally  advertised  products,  without 
mentioning  the  name  of  any  single  product.  Suppose,  in  such 
a  campaign,  the  public  be  enlightened  as  to  reasons  why  retail 
dealers  prefer  to  sell  unknown,  untrade-marked  and  unadver- 
tised  brands.  Suppose  the  public  be  taught  that  an  established 
name,  and  a  price  set  by  the  manufacturer,  is  the  best  guarantee 
of  quality  —  of  full  value.  Suppose  the  public  be  taught  in 
every  possible  way  to  believe  in  advertised  products,  and  in 
the  quality  necessary  to  make  advertising  justifiable.  In  brief, 
suppose  salesmanship  be  met  with  salesmanship  on  a  scale  that 
will  make  things  more  equal.  Would  a  campaign  of  this  kind, 
conducted  on  a  big,  frank,  open  and  above-board  plan,  have  its 
effect? 

Wouldn't  it  even  be  possible,  in  an  organized  effort  of  this 
kind,  to  supply  a  sign  or  some  means  of  public  identification 
to  every  store  whose  proprietor  would  agree  to  sell  what  the 
customer  asked  for  9  A  penalty  for  wilful  violation  might  be 
included  as  a  condition  of  the  agreement  and  a  fund  ^tablished 
for  the  prosecution  of  all  violators.  There  wouldn't  be  many 
prosecutions  because  that  kind  of  publicity  would  hardly  be 
healthy  for  any  store.     .     .     . 


There  is  plenty  of  room  for  difference  of  opinion  as  to  the 
merits  of  Mr.  Horr's  plan  to  correct  the  "substitution  evil." 


110        ADVERTISING  AS  A  BUSINESS  FORCE 

But  there  can  be  no  avoiding  the  fact  that  as  appeals  to  the 
consumer  multiply  they  are  apt  to  damage  each  other  by  the 
very  success  with  which  they  stir  up  or  divert  demand. 

CONSUMER  CO-OPERATION  AS  A  SOLUTION  FOR  CONSUMER  ILLS 

Among  the  solutions  for  some  of  the  more  pressing  distribu- 
tion problems  of  the  consumer  is  that  worked  out  in  Great 
Britain   and   on   the   Continent  in  the  co-operative 
Co-opera-  ownership   of  factories   by   consumers.      Under  the 
twnasa    caption   "Does  Consumer  Co-operation  Threaten?" 
for  Corisu-  Charles  W  Hurd,  of  the  Printers'  Ink  staff,  brings  out 
mer  Ills   gome  points  as  to  the  spread  of  this  line  of  activity  in 
this  country  as  compared  with  its  development  in  Europe,  and 
its  effect  on  the  relations  between  producer  and  consumer  if  it 
should  become  common.       Following  the  portion  of  the  article 
given  here  there  is,  in  the  original,  a  quotation  from  the  secre- 
tary of  the  new  co-operative  organization  suggesting  its  possible 
future  plans,  and  a  series  of  quotations  from  American  manufac- 
turers who  do  not  seem  to  regard  this  form  of  resistance  on  the 
part  of  the  consumer  as  a  very  imminent  danger: 

*The  first  consumer's  co-operative  factory  ever  established  in 
America  was  started  in  New  York  a  few  months  ago  and  al- 
ready has  four  retail  outlets.  It  is  a  hat  factory.  One  of  the 
stores  handles  men's  furnishings  as  well,  including  many  trade- 
marked  articles,  and  all  of  the  stores  will  probably  develop 
along  this  line.  The  co-operative  is  seeking  to  organize  the 
widely  scattered  one  hundred  and  fifty  or  so  co-operative  retail 
stores  in  the  country  into  one  national  organization  and  pool 
their  buying  power. 

Modest  as  this  beginning  is,  it  is  of  vastly  more  seriousness 
than  the  sudden  and  astonishing  crop  of  consumers'  buying 
associations  and  municipal  marketing  which  just  now  is 
bulking  so  large  in  the  public  eye.  This  latter  is  a  mushroom 
growth,  an  impulsive  middle-class  protest  against  the  high  cost 

*Printers  Ink,  April  25,  1912,  p.  80. 


ADVERTISING  AND  THE  CONSUMER         111 

of  living,  and  sooner  or  later  will  subside,  leaving  only  a  few 
surface  memorials  to  mark  its  present  activity 

Its  only  real  significance  is  that  it  marks  a  profound  alteration 
in  the  popular  mind  respecting  co-operative  ventures,  corre- 
sponding with  the  changed  industrial  conditions  and  the 
widespread  social  unrest,  and  indicates  that  America,  so  long 
immune,  may  now  possibly  offer  a  more  hospitable  soil  for  the 
growth  of  the  powerful  workingmen's  co-operative  movement 
which  has  already  invaded  every  other  country  on  the  globe 
and  is  a  commercial  and  industrial  phenomenon  of  the  first  rank. 

The  co-operative  factory  just  established  in  New  York  is 
the  vanguard  of  this  movement. 

If  the  co-operatives  of  this  type  were  merely  wholesale  and 
retail  buying  societies,  they  would  deserve  only  the  passing 
interest  of  the  national  advertiser,  but  they  are  engaged  in 
manufacturing  as  well,  and  their  aim  is  not  merely  the  moderate 
one  of  cheapening  goods  to  a  few  members,  but  of  extending 
the  system  more  and  more  until  there  is  effected  a  complete 
industrial  and  commercial  revolution  through  absolute  monopoly. 

This  is  somewhat  of  a  large  undertaking,  but  it  must  be  con- 
fessed that  the  co-operatives  have  made  a  tolerable  showing 
at  the  start.  They  are  only  forty  or  fifty  years  old,  but  they 
are  supported  by  the  heads  of  some  10,000,000  families  in  all 
countries,  which  means  about  50,000,000  people  in  all. 

In  England,  one  family  in  every  four  is  represented  in  the 
co-operatives.  The  percentage  in  Scotland  is  even  higher. 
In  these  two  countries  the  two  co-operatives  did  a  business 
of  more  than  $650,000,000  in  1911  —  an  increase  of  more  than 
8  per  cent,  over  the  previous'  year,  despite  the  business  depres- 
sion or  perhaps  because  of  it. 

The  German,  Belgian,  and  Austrian  societies  are  much 
younger,  but  are  already  large  and  are  growing  at  a  rate  which 
is  retarded  somewhat,  though  not  checked,  by  private  initiative 
and  legislative  hostility.  The  movement  is  closely  allied  with 
the  labor  movement,  and  outside  of  England  with  the  revolu- 
tionary movement,  which  it  helps  largely  to  finance. 

So  it  is  evident  that  the  movement  holds  something  more 
for  the  American  manufacturer  than  merely  academic  interest, 
even  at  this  time  when  such  consequences  as  those  described 
must  be  remote  in  respect  to  our  own  land,  because  the  con- 
tinuous and  complete  extension  of  the  system  in  this  country 
would  soon  begin  to  handicap  many  manufacturers,  impair 


112        ADVERTISING  AS  A  BUSINESS  FORCE 

the  value  of  their  trade-marks  and  good  will,  and  progressively 
destroy  it. 

It  would  restrict  and  finally  destroy  advertising  as  we  know  it, 
inasmuch  as  the  advertising  of  the  co-operative  is  for  the  most 
part  confined  to  simple  announcements,  and  there  is  no  competi- 
tion within  the  societies  to  stimulate  its  development.     .     . 

The  workingmen's  co-operative,  the  one  which  is  succeeding 
on  a  large  scale  to-day,  is  different  from  all  other  kinds.  It 
starts  with  the  organization  of  the  market,  and  works  back 
as  fast  as  possible  from  retail  to  wholesale  and  wholesale  to 
manufacturing.  Its  thousands  of  members  are  so  many 
salesmen  to  bring  other  members  in.  It  always  knows  its 
market,  and  is  always  extending  it. 

Practically  all  of  the  successful  co-operatives  are  founded  on 
the  English  or  Rochdale  model  —  that  is  to  say,  they  are  col- 
lectively owned  and  democratically  administered.  The  mem- 
bers themselves  supply  the  capital  in  small  payments,  but 
draw  no  dividends  except  as  they  buy,  and  then  in  the  shape 
of  reduced  prices. 

The  English  and  Scottish  co-operatives  manufacture  a  great 
many  different  commodities,  from  bread  and  canned  food  to 
clothing,  shoes,  and  bicycles.  The  largest  bakeries  in  the 
world  under  one  management  are  those  of  the  Glasgow  co- 
operative. The  second  largest  are  those  in  Vienna  belonging 
to  an  Austrian  co-operative. 

Ground  is  being  broken  now  by  a  co-operative  in  Manchester, 
England,  for  a  textile  mill  which  it  is  claimed  will  be  the  largest 
in  the  world. 

All  the  goods  made  in  these  co-operative  factories  and  mills 
are  manufactured  and  sold,  not  for  private  profit,  but  for  the 
benefit  of  the  consumer  members.  There  is  no  room  in  their 
plans  for  private  enterprise.  If  capital  is  borrowed,  as  it 
sometimes  is,  the  usual  market  rate  of  interest  is  paid,  but  no 
private  investment  in  co-operative  work  is  permitted. 

The  factory  is  given  a  small  profit  to  provide  for  extensions, 
repairs,  depreciation,  new  machinery,  etc.,  and  the  retail 
establishments  are  allowed  a  small  profit  for  the  same  reasons. 
The  balance  of  the  saving  is  divided,  part  among  the  operatives 
and  salespeople,  in  addition  to  their  wages,  part  among  the 
consumers,  and  the  rest  is  used  for  propaganda  or  advertising 
the  system.     In  addition,  there  are  sick  benefits. 

The  wages  are  not  high.     The  highest  officer  chosen  by  the 


ADVERTISING  AND  THE  CONSUMER         113 

Scottish  co-operatives  never  received  more  than  the  equivalent 
of  thirty-seven  dollars  a  week.  He  held  office  for  thirty  years, 
and  is  now  president  of  the  newly  organized  international 
alliance. 

This  outlines  the  sort  of  competition  the  manufacturers  of 
the  United  States  may  have  to  face  before  many  years.     .     .     . 

EFFECT    OF  ADVERTISING   ON   VALUE  OF  GOODS 

One  other  point  and  we  shall  be  obliged  to  leave  this  part 
of  our  discussion.  And  this  point  is  chosen  not  because  it  is 
intrinsically  more  important  than  many  others  which  could 
be  mentioned,  but  because  it  suggests  one  of  the  ways  in  which 
advertising  affects  the  goods  via  the  consumer,  just  as  we 
already  have  seen  that  it  affects  the  consumer  direct  and  the 
selling  mechanism  via  the  consumer. 

If  the  consumer's  attitude  toward  the  goods  is  changed  by 
the  advertising,  obviously  the  consumer's  idea  of  their  value  to 
him  must  be  altered,  and  it  may  even  be  possible  that  the  real 
value  may  be  changed  as  well.  H.  W.  Barnes,  Advertising 
Manager  of  the  Russell-Miller  Milling  Company,  of  Minneapolis, 
contends  that  advertising  makes  goods  more  valuable  because 
of  these  changes  in  the  consumer's  attitude,  as  well  as  for  other 
reasons.     He  says: 

*Does  the  buyer  of  the  advertised  article  get  his  money's 
worth-f*  I  prefer  to  rephrase  the  subject  and  say,  "The  buyer 
of  a  wisely  advertised  article  gets  more  for  his  money  than  the 
buyer  of  an  unadvertised  article."  Whether  the  latter  gets 
his  money's  worth  depends  upon  what  he  expects  for  his  money. 
One  who  is  familiar  with  advertising  expects  more  and  is  not 
satisfied  with  the  mediocre. 

We  are  led  to  buy  an  effectively  advertised  article  partly 
on  account  of  its  wide  distribution.  You  know  that  once  you 
try  and  like  it,  you  will  be  able  to  secure  it  everywhere.  "  Univer- 
sal accessibility,"  then,  if  you  please,  is  a  quality  peculiar  to 
the  advertised  article,  and  this  exclusive  quality,  you  must 
admit,  adds  to  its  value.     Whether  the  advertising  or  the 

''Printers"  Ink,  August  31,  1911,  p.  62. 


114        ADVERTISING  AS  A  BUSINESS  FORCE 

distribution  comes  first  is  immaterial.     It  is  certain  that  the 
advertising  and  the  wide  distribution  go  together. 

Suppose  two  brands  of  soap  of  equal  quality  were  manufac- 
tured in  a  certain  town  and  were  sold  at  identically  the  same 
price.  In  the  beginning  one  would  get  just  as  much  for  his 
money,  whether  he  bought  one  brand  or  the  other.  One 
manufacturer,  by  advertising  and  aggressive  selling  methods, 
places  his  goods  in  practically  every  drug  and  grocery  store  in 
every  city  and  village  throughout  the  country,  so  the  folks 
who  had  become  accustomed  to  this  manufacturer's  brand 
were  then  in  a  position  to  secure  their  favorite  soap  wherever 
they  happened  to  want  it.  The  added  convenience  gave 
them  more  for  their  money  than  formerly,  or  more  than  in 
buying  the  unadvertised  brand.  The  increased  output  enabled 
the  manufacturer  to  cut  down  his  cost  per  cake  sufficiently 
to  cover  the  advertising  and  still  receive  the  same  returns 
from  his  investment,  and  so  the  purchaser  received  more  for 
his  money  in  added  convenience. 

Granting,  even,  that  the  advertising  had  to  be  charged  up  to 
the  customer  and  that  each  bar  actually  cost  half  a  cent  more 
than  the  unadvertised  brand,  even  then  it  was  certainly  worth 
more  than  the  extra  cost  for  the  purchaser  to  be  able  to 
always  buy  the  article  to  which  he  was  accustomed  wherever  he 
wanted  it. 

The  Illinois  farmer,  after  moving  to  Colorado,  would  scarcely 
know  how  to  do  his  work  unless  he  could  get  the  same  kind  of 
implements  and  tools  that  he  had  been  using.  The  first  item 
he  notices  in  his  new  local  paper  is  the  advertisement  telling 
about  his  favorite  mowing  machine  or  plow.  He  is  not  only 
able  to  get  exactly  what  he  wants,  but  he  is  able  to  buy  it 
cheaper  than  he  could  a  generation  ago,  before  advertising  had 
accomplished  the  universal  distribution  of  this  particular  class 
of  goods.  He  gets  more,  perhaps,  for  his  money  in  buying  this 
kind  of  goods  than  in  buying  any  other.  There  is  no  question 
that  in  buying  some  advertised  articles  you  get  more  for  your 
money  than  in  buying  some  other  similar  article  equally  well 
advertised.  The  element  of  the  value  of  universal  accessibility, 
however,  exists  in  either  case. 

When  an  advertised  article  is  used  with  satisfaction  in 
Chicago,  it  is  worth  a  lot  to  know  that  when  one  gets  to  Minne- 
apolis he  can  keep  right  on  using  the  same  identical  article. 
It  is  worth  more  than  the  advertising  cost  not  to  be  compelled 


ADVERTISING  AND  THE  CONSUMER  115 

to  experiment  with  unfamiliar  brands  until  he  finds  one  that 
exactly  fills  his  requirements. 

It  is  worth  more  than  the  advertising  cost  to  know  when  one 
buys  a  camera  that  he  can  always  get  the  proper  supplies  for 
it,  no  matter  where  he  is,  camping  or  hunting.  He  gets  more 
for  his  money  than  he  could  by  buying  the  unadvertised  article 
and  suffering  the  inconvenience  of  not  being  able  to  secure 
supplies  when  they  are  most  needed. 

Articles  that  are  on  sale  in  a  large  number  of  stores  are 
bought  simultaneously  by  thousands  of  persons.  In  effect, 
this  amounts  to  co-operative  buying,  and  it  is  generally  recog- 
nized that  goods  can  be  bought  more  cheaply  in  large  quantities 
than  in  small  quantities.  In  other  words,  each  one  who  buys 
the  article  in  question  gets  more  for  his  money  than  he  can  get 
otherwise,  and  he  can  secure  a  favorite  article  whenever  and 
wherever  he  happens  to  want  it,  makes  the  advertised,  univer- 
sally accessible  article  more  valuable,  a  "better  buy." 

The  properly  advertised  article  possesses  more  value  than 
the  same  article  unadvertised  or  poorly  advertised.  That  is, 
the  advertising  invests  in  the  article  qualities  which  add  to 
the  satisfaction  and  the  pleasure  and  pride  of  the  buyer.     .     .     . 

When  I  think  of  watches,  a  particular  one  stands  out  far 
above  all  the  others.  Its  manufacturers  have  succeeded  in 
building  up  around  it  an  atmosphere  of  exclusiveness,  superi- 
ority and  other  qualities  on  account  of  which  I  could  not  be 
entirely  satisfied  with  any  other  kind  of  timepiece.  If  I  were 
to  buy  one  I  should  feel  that  I  had  bought  something,  a  lot  of 
things,  that  other  watches  do  not  possess  —  that  I  had  got 
more  for  my  money  than  I  could  by  buying  a  watch  whose 
characteristics  were  not  well  known  to  me. 

I  might  recount  numberless  illustrations  of  how  manufac- 
turers of  breakfast  foods,  fountain  pens,  mattresses,  flour,  and 
hundreds  of  other  commodities  have  created  in  the  minds  of 
people  ideals  which  make  it  possible  for  the  purchasers  of 
these  articles  to  actually  get  more  value  out  of  them.  These 
products  are  worth  more  than  unadvertised  products  because 
the  advertising  has  invested  them  with  a  peculiar  value. 

Advertising  clothes  the  article  with  its  aesthetic  qualities 
so  effectually  that  the  actual  wood,  iron,  gold,  wool,  cotton,  or 
other  material  is  lost  sight  of  in  contemplation  of  the  "con- 
dition" that  may  be  brought  about  through  the  possession  of 
the  commodity.     And   on   this   account  also  the  advertised 


116        ADVERTISING  AS  A  BUSINESS  FORCE 

article  is  a  "better  buy"  than  the  unadvertised  one.  The  one 
may  fill  an  important  place  in  your  plan  of  things,  may  contrib- 
ute its  share  in  your  happiness  and  profit;  the  other  is  simply 
so  much  inanimate  material. 

The  merchant  who  buys  a  cash  register  does  not  buy  a 
drawer  in  which  to  put  his  cash,  a  lot  of  buttons  to  push,  a 
crank  to  turn,  and  a  number  of  various  size  cog-wheels.  He  is 
led  rather  to  see  in  his  mind's  eye  the  condition  of  order,  exact- 
ness, knowledge  of  his  business,  and  increased  profits  which  will 
come  from  the  intelligent  use  of  the  machine. 

And  so  if  it's  true,  and  I  think  you  must  agree  that  it  is, 
that  wise  and  honest  advertising  makes  an  article  universally 
accessible,  invests  it  with  distinctive  and  exclusive  qualities, 
and  enables  the  buyer  to  choose  on  account  of  the  desired 
condition  the  article  will  make  jx)ssible,  then  it  is  pretty  safe 
to  say  that  advertising  is  not  advertising  unless  it  explains  and 
teaches  —  unless  it  conveys  ideas  and  ideals.  Real  advertising 
adds  to  the  economic  and  social  welfare  of  the  commonwealth, 
and  so  of  necessity  the  advertised  article  has  added  value 
over  the  unadvertised. 


These  few  points,  out  of  many  which  could  be  considered, 
have  been  presented  in  order  to  help  us  appreciate  how  much 
more  than  a  mere  market  for  goods  is  the  modern  consumer. 
As  an  object  of  advertising  attack  he  is  a  complicated  and 
variable  composite  under  pressure  from  within  and  without. 
And  there  is  scarcely  an  emotional  motive,  or  an  economic 
impulse  with  any  influence  on  human  action,  which  can  be 
ignored  with  safety  by  the  advertiser  who  wants  to  catch  and 
hold  him. 

Nor  is  the  consumer  inert.  He  has  powers  of  resistance,  and 
he  is  learning  how  to  use  them.  Even  leaving  the  supremely 
important  problems  of  consumer  psychology  out  of  consider- 
ation, he  has  means  at  hand  for  taking  advantage  of  any 
weakness  in  advertising  plans.  The  consumer  problems  of 
the  modern  advertiser  are  not  merely  to  discover  buyers 
of  goods  and  to  exploit  them.  They  are  as  intricate  as 
war  plans. 


ADVERTISING  AND  THE  CONSUMER         117 

REVIEW   QUESTIONS  —  CHAPTER  V 

1.  How  does  modern  advertising  affect  the  consumer's 
ability  to  choose  what  he  will  buy? 

2.  Do  you  agree  with  Professor  Carver's  suggestion  of  a 
parallel  between  methods  of  warfare  and  methods  of  advertising 
attack  and  resistance? 

3.  What  were  the  main  features  of  the  first  campaign 
for  advertising  the  Eleventh  Edition  of  the  Encyclopaedia 
Britamiica? 

4.  How  can  "standards  of  living"  be  affected  by  adver- 
tising? 

5.  What  features  in  the  ready-made  clothing  business  differ 
from  the  problems  involved  in  advertising  factory-made  shoes? 

6.  How  does  Mr.  Horr  plan  to  meet  the  problems  of  substi- 
tution?    What  are  the  main  defects  in  his  plan? 

7.  How  does  co-operative  ownership  of  factories  by  con- 
sumers affect  the  advertising  problems  of  the  industries  in 
which  these  concerns  are  found? 

PROBLEM  QUESTIONS  —  CHAPTER  V 

1.  Make  a  list  of  consumer  defences  in  addition  to  those 
mentioned,  and  show  how  advertising  plans  are  modified  by 
them. 

2.  Discuss  the  effect  of  price  habits  and  buying  customs 
on  the  consumer's  freedom  of  choice. 

3.  If  two  advertisers  of  shaving  soap  advertised  equally 
widely  and  with  approximately  equal  effectiveness,  would  the 
results  secured  by  each  and  the  effects  on  their  campaign 
plans  be  the  same  as  if  there  were  five  at  work  with  the  same 
energy  and  effectiveness  in  the  same  market?  Would  the 
final  maximum  limit  of  possible  sales  of  shaving  soap  in  the 
market  be  ascertainable? 

4.  Could  the  Encyclopaedia  Britannica  methods  of  attack 
have  been  equally  well  employed  in  selling  the  Ninth  Edition 


118        ADVERTISING  AS  A  BUSINESS  FORCE 

ill  the  early  nineties?  Could  it  be  employed  again  in  the  sale 
of  the  present  edition?  How  does  the  campaign  now  in 
progress  for  the  same  work  differ  from  the  former  one? 

5.  If  10  per  cent,  of  the  boot  and  shoe  producing  capacity 
of  the  country  should  come  under  control  of  consumers'  co-oper- 
ative societies,  would  it  affect  the  advertising  methods  of 
the  shoe  business?  If  the  percentage  should  increase  to  35,  how 
would  it  be?     What  if  it  were  50  or  60? 


CHAPTER  VI 

THE   "regular"   retailer 

THE  multiplying  of  the  appeals  to  the  consumer  has 
completely  changed  the  retailer's  position  as  a  part  of 
the  distribution  system.  Formerly,  the  selling  of 
the  goods  was  his  main  service,  and  the  selling  of  the  goods 
involved  influencing  the  consumer  as  to  the  nature  of  his  wants, 
bargaining  with  him  over  the  price,  and  then  convincing  him 
that  he  was  satisfied  with  his  purchase. 

Under  present  conditions,  however,  largely  as  a  result  of 
advertising,  the  nature  of  the  consumer's  wants  is,  at  least 
partially,  predetermined.  The  price  is  more  or  less  completely 
set  and  satisfaction  is  guaranteed.  And  all  of  these  services 
are  performed  not  by  the  dealer  but  by  the  producer  of  the 
goods,  or  whoever  stands  sponsor  for  them  in  the  advertising. 
The  retailer's  service  in  the  case  of  nationally  advertised  goods 
thus  becomes  primarily  a  delivery  service  and  not  a  selling 
service. 

For  some  time  after  this  change  in  the  retailer's  position 
became  conspicuous,  nearly  everybody  in  the  selling  system, 
including  the  retailer,  believed  that  the  retailer  was  to  a  large 
extent  helpless  and  that  he  had  become  a  mere  order-taker. 
Recently,  however,  the  retail  dealer  has  come  to  feel  something 
of  the  real  strength  of  his  position.  He  now  sees  that  while 
he  can  be  forced  by  the  national  advertiser  to  a  certain  extent, 
he  has,  after  all,  a  very  valuable  advantage  in  his  personal 
contact  with  the  consumer.  He  has  come  to  something  like 
a  real  appreciation  of  the  fact  that  it  is  through  him  alone 
that  most  of  the  psychological  reactions  produced  by  advertising 

119 


120        ADVERTISING  AS  A  BUSINESS  FORCE 

can  be  converted  into  real  sales.  Within  the  past  three  years 
there  has  been  a  very  marked  increase  in  the  recognition  given 
to  the  retailer  in  national  advertising  plans,  and  it  is  coming 
to  be  accepted  as  a  fact  worth  consideration  that  the  plans 
which  have  met  with  greatest  success  are  those  which  have 
secured  the  heartiest  and  most  sincere  co-operation  of  the 
retail  dealer. 

Retail  distribution  has  been  radically  changed  by  modern 
conditions  of  living.  Rapid  transit,  the  telephone,  and  other 
modern  inventions  have  removed  many  of  the  old  limits  on 
a  retail  store's  radius  of  sale.  Some  retailers  have  been  able 
to  take  advantage  of  the  new  conditions.  And  as  their  sales 
increased  in  volume  their  purchases  increased  correspondingly. 
They  no  longer  need  the  services  of  a  wholesaler  for  most  of 
their  purchases,  since  they  can  buy  on  as  large  a  scale  as  the 
wholesaler  himself.  They  now  go  to  the  producer  direct. 
On  the  other  hand,  many  retailers  have  not  been  able  to  expand 
in  this  way.  And  so  we  have,  side  by  side,  two  types  of 
retailer:  (1)  The  "regular"  retailer,  still  buying  through 
the  wholesaler,  and  (2)  The  new  type  of  retailer  buying  with 
little  or  no  wholesaler  help.  We  shall  divide  our  discussion  of 
the  retailer  into  two  parts  to  correspond  with  these  two  types 
of  retailer.  First  we  shall  consider  a  collection  of  cases  showing 
the  place  of  the  "regular"  retailer  in  national  advertising  and 
distribution  campaigns,  and  the  methods  employed  in  getting 
his  co-operation  in  selling  plans.  After  that  (Chapter  VII) 
we  shall  consider  the  advertising  aspects  of  some  of  the  new 
forms  of  retailing,  particularly  the  department  store,  the  chain 
store,  the  mail-order  house  and  one  or  two  forms  of  co-operative 
store  which  have  become  important. 

There  are  many  ardent  advocates  of  the  importance  of  the 
"regular"  type  of  retailer  as  a  factor  in  distribution.  Among 
them  is  George  L.  Louis,  an  advertising  agent  in  Chicago. 
Mr.  Louis,  in  a  recent  article,  explained  some  features  of  his 
ideas  by  telling  how  six  maufacturers  in  unspecified  lines  under- 


THE  "REGULAR"  RETAILER  121 

took  to  link  up  their  national  advertising  campaigns  with  the 
work  of  small  retailers,  Mr.  Louis,  it  will  be  seen,  confines 
most  of  his  attention  to  the  methods  of  reaching  small  stores 
in  towns  of  less  than  50,000  inhabitants.  This  market,  as  he 
clearly  shows,  is  extremely  important.  There  are  many, 
however,  who  believe  that  this  part  of  the  consuming  population 
of  the  country  can  be  reached  best  by  approaching  it  via  the 
big  cities  with  their  equipment  of  large  stores.  This  type  of 
retailing  we  shall  examine  in  greater  length  in  the  following 
chapter. 

Portions  of  Mr.  Louis's  article  are  as  follows: 

*Restandardization  in  distribution  —  in  selling  and  buying, 
in  the  passage  of  merchandise  from  manufacturer  to  retailer, 
from  retailer  to  consumer  —  has  begun.  With  it  has  come, 
too,  decided  reductions  in  selling  costs  and  a  proportion- 
ate lowering  of  the  price  paid  for  his  purchases  by  the  con- 
sumer.    .     .     . 

It  has  been  my  privilege  to  follow  closely  and  intimately  the 
development  of  the  selling  plans  of  six  manufacturers  engaged 
in  distinct  lines  of  business  and  each  among  the  largest  and 
most  successful  of  his  kind.  Together  these  six  establishments 
present  in  fairly  complete  fashion  the  vital  phases  of  what  I 
have  called  the  re-standardization  of  merchandising. 

No  one  of  them,  however,  has  applied  its  principles  to  every 
department  of  his  distribution  program.  For  the  purposes 
of  this  article,  therefore,  the  individual  features  which  these 
six  concerns  have  developed  most  fully  have  been  assembled 
and  dovetailed  into  a  composite  whole.  And  because  this 
composite  plan  can  be  applied  to  almost  any  merchandising 
business  it  will  be  set  forth  here  as  a  complete  unit.  The  details 
have  been  tried  out  and  proved  by  manufacturers  of  men's 
clothing,  women's  apparel,  hardware  specialties,  toilet  and 
drug  preparations  and  foodstuffs  who  have  built  up  tremendous 
and  profitable  businesses  by  these  methods. 

Four  of  these  six  manufacturers  formerly  conducted  their 
marketing   in   the  conventional   way.     There   has,   therefore, 

*System,  September,  1912,  p.  272.  This  article  is  the  sixth  in  a  series  by  Mr. 
Louis  appearing  in  System  for  November  and  December,  1911,  and  February, 
April,  and  June,  1912. 


122        ADVERTISING  AS  A  BUSINESS  FORCE 

been  ample  opportunity  to  contrast  methods,  to  gather  evidence 
and  to  deduce  conclusions.  The  other  two  firms  are  of  recent 
origin;  but  their  adoption  of  the  new  methods  from  the  begin- 
ning has  enabled  them  to  make  records  of  consistent  advances 
unusual  in  the  case  of  newcomers  in  their  fields. 

All  of  these  manufacturers  distribute  through  retailers.  The 
retailer,  therefore,  is  the  most  important  cog  in  the  machinery 
of  their  distribution.  He  is  recognized  as  such  and  is  as  closely 
studied  and  analyzed  as  the  processes  of  manufacturing  them- 
selves. The  dealer  is  acknowledged  to  be  a  principal  in  the 
marketing  of  the  product,  and  the  alliance  with  him  is  a  real 
partnership. 

These  manufacturers  approach  the  retailer  directly  through 
three  mediums:  the  salesman,  the  letter,  and  the  trade  journal. 
Since  each  of  these  has  its  distinct  field  and  function  in  selling, 
they  are  used  together.  The  salesman,  letter  and  trade  journal, 
employed  at  the  proper  time  and  in  the  proper  way,  will  gain 
the  attention  of  the  most  indifferent  dealer. 

The  letter  precedes  the  salesman.  All  of  the  preliminary 
work,  the  introduction  of  the  manufacturer  to  the  retailer,  is 
accomplished  through  the  mail.  Ordinarily,  unless  the  sales- 
man can  conveniently  and  inexpensively  make  new  towns,  he  is 
not  permitted  to  waste  time  and  money  in  visiting  prospects. 
Until  the  letter  establishes  the  dealer's  confidence,  the  salesman 
avoids  him.     ... 

'   What  a  properly  balanced  selling  plan  means  to  a  business 

can   be   seen   after  study   and  analysis  of  the  experience  of 

these  manufacturers.     Follow-up  letters  can  be  made 

A  Balanced  ^^  eliminate  much  of  the  uncertainty    involved    in 

Plan  seeking  new  accounts.  They  lessen  selling  expense. 
They  are  the  only  practicable  means  of  getting  a 
huge  volume  of  small  orders  on  which  the  profit  is  larger 
than  the  average.  The  trade  journal  is  used  as  a  co- 
worker with  the  letter.  This  space  is  bought  and  used  for 
a  definite  purpose  and  must  fulfil  that  purpose.  The  copy 
is  changed  in  every  issue  and  is  keyed  by  offers  of  booklets 
on  some  appropriate  retail  merchandising  subject  like  selling 
plans,  special  feature  sales,  and  so  on.  Each  paper  must 
produce  inquiries  to  justify  the  investment. 

All  of  these  manufacturers  are  radical  in  their  attitude 
toward  their  two  possible  markets  —  the  large  city  and  the 
small  town.    The  cities  are   seemingly   neglected;   all   their 


THE  "REGULAR"  RETAILER  123 

energy  and  effort  are  concentrated  on  the  small  towns.  Every 
town,  village,  and  hamlet  where  there  is  one  or  more  stores 
is  "on  the  sales  map."  The  so-called  "little  fellows,"  fre- 
quently ignored  on  the  ground  that  their  buying  power  is  too 
small,  cater  to  at  least  40,000,000  people. 

Here  are  some  statistics  which  have  influenced  these  manu- 
facturers to  consider  the  small  town  as  their  most  important 
market.  According  to  the  last  census,  there  are  only  2,405 
cities  in  the  United  States  which  have  populations  of  2,500 
or  more.  Including  the  other  centres  which  have  a  million 
or  more  people  within  their  borders,  the  total  urban  population 
is  only  42,623,883.  In  the  territory  classified  as  rural,  on  the 
other  hand,  there  are  49,348,883  persons.  Of  these  8,119,528 
live  in  11,784  incorporated  towns  of  less  than  2,500  population, 
but  the  majority  of  the  remaining  41,229,355  buy  the  bulk 
of  their  necessities  in  these  smaller  towns.     .     .     . 

To  begin  with  the  small  towns  where  an  equal  volume  of 

business  and  greater  profits  can  be  secured,  and  work  from  this 

The  Small  ^^^^  ^^  ^^^  ^^^^  trade,  is  the  quicker,  easier,  safer 

Market    journey  for  the  young  manufacturing  house  to  make. 

Is  the  For  the  concern  already  established  in  the  larger 
Short  Ctd  trade  centres  the  neglected  "provinces"  offers  an 
attractive  field.  To  work  it  effectively,  however,  it  must  be 
treated  seriously  and  not  as  a  mere  adjunct  to  the  city  terri- 
tory. 

Consumers  in  smaller  cities  and  towns  buy  quality  goods  — 
all  sorts  of  luxuries  and  conveniences  for  their  homes,  delicacies 
for  their  tables,  devices  that  minister  to  their  amusement. 
Cheap  buying  is  not  characteristic,  as  is  commonly  assumed. 
Per  capita  they  buy  much  larger  quantities  of  staple  com- 
modities like  fiour,  foodstuffs  in  general,  stoves,  refrigerators, 
and  so  on.  A  large  percentage  of  city  folk  live  in  apartments 
which  are  rented  ready  for  occupancy,  painted,  decorated  and 
even  partly  furnished.  A  goodly  proportion  of  them  eat 
in  restaurants,  where  they  cannot  specify  the  salt,  flour,  sugar, 
canned  goods,  and  other  foods  which  they  consume  and  where 
silver,  china,  and  table-ware  are  not  greatly  considered. 

Results  which  the  six  manufacturers  are  showing  prove  that 
sales  are  increased  in  volume,  profits  are  larger,  and  all  condi- 
tions are  better  if  but  one  dealer  is  sold  in  each  locality.  With 
the  exception  of  one  house  of  the  six  figuring  in  this'  article, 
selling  through  exclusive  dealers  is  the  fixed  rule.     The    one 


124        ADVERTISING  AS  A  BUSINESS  FORCE 

exception  is  a  manufacturer  of  toilet  preparations,  which  are 
purchased  in  such  limited  quantities  by  each  drug  store  that 
sales  through  all  stores  are  necessary. 

But  in  all  lines  of  men's,  women's,  and  children's  apparel, 
furniture,  and  so  on,  the  volume  of  business  and  net  profit  can 
usually  be  increased  and  the  selling  cost  decreased  by  selling 
exclusively  through  one  retailer. 

Regardless  of  how  extensive  and  how  powerful  a  national 
campaign  may  be,  if  the  dealer  is  not  back  of  the  goods,  only 
the  minimum  of  sales  will  result.  The  "created  demand" 
impetus  is  not  sufficient  to  overcome  an  indifferent  retailer. 
The  final  force  that  completes  the  sale  must  be  as  active  and 
as  strong  as  the  first  stimulus  that  arouses  the  consumer's 
desire.  It  is  acknowledged  that  the  dealer  controls  his  local 
situation;  that  the  consumer  waits  on  him  for  his  final  selling 
argument.  These  manufacturers  have  been  taught  by  experi- 
ence that  when  two  or  more  merchants  in  a  given  locality  sell 
the  same  branded  goods,  they  will  not  lend  their  names  and 
energies  to  promote  such  goods  to  the  fullest  possible  extent. 
For  the  fruits  of  their  efforts  can  be  shared  by  their  competitors. 
The  merchant  knows  that  he  jeopardizes  his  own  welfare  and 
profits  if  he  advertises  goods  that  his  neighboring  rival  also  sells. 

When  a  merchant  has  the  sole  selling  privileges  and  is  free 
to  build  up  his  trade  with  this  as  an  asset,  here  is  an  example  of 
what  can  happen : 

In  an  Illinois  town  of  20,000,  one  of  the  six  concerns  originally 
sold  to  five  stores.     The  sales  averaged  about  $1,200  annu- 

What  ^^^y*  With  a  change  in  policy  the  goods  were  re- 
Happened  stricted  to  one  store.  Immediately  that  dealer  began 
in  a  Small  to  advertise  the  line  in  the  local  newspapers  and  by 

IlKnois    window  displays.     The    first    year's    sales  ran  over 

fown     $3  000;  they  have  increased  since. 

These  concerns  nourish  the  power  and  the  personality  of 
their  retailers.  They  have  found  that  the  more  highly  devel- 
oped the  retailer  is,  the  more  valuable  he  is  as  a  selling  outlet  — 
for  then  he  can  and  will  sell  more  goods. 

Instead  of  submerging  the  identity  and  individuality  of  the 
retailer,  his  initiative  and  independent  activities  are  encouraged. 
The  bond  of  good-will  which  these  manufacturers  establish 
with  the  retailer  brings  a  harmony  which  eliminates  the  "dealer 
problems"  and  wastes  in  marketing.  Selling  to  the  merchant 
is  reduced  to  its  simplest,  quickest  form.     It  becomes  only  an 


THE  "REGULAR"  RETAILER  125 

exposition  of  goods  and  prices.  The  dealer  drops  his  customary, 
defensive  attitude  in  buying.  He  is  free  to  consider  the  mer- 
chandise and  its  seUing  value  without  fear  that  the  salesman 
will  attempt  to  "put  one  over  on  him." 

The  caution  and  consequent  delay  in  buying  that  char- 
acterizes the  average  retailer  have  been  further  removed  by 
the  "small-order"  policy  that  some  of  the  manufacturers 
pursue.  They  make  it  a  rule  to  sell  the  merchant  as  small  an 
order  as  is  consistent  with  his  selling  possibilities.  There  is 
no  stuffing  or  forcing  of  sales.  The  result  is  that  the  salesman 
makes  a  greater  number  of  individual  sales  every  week  than 
he  could  possibly  land  if  he  attempted  to  sell  larger  orders. 
He  "cleans  up"  with  each  customer  in  half  the  usual  time  and 
covers  twice  the  ground  the  average  road  man  can.  Selling 
expense  is  reduced  materially  since  all  the  "re-orders"  come 
in  by  mail. 

The  quick  turn-over  of  a  small  stock  leaves  an  unfailing 
impression  upon  the  merchant.  He  re-orders  by  mail  before 
his  stock  is  too  much  depleted,  while  continual  reminders 
from  the  manufacturer  to  keep  his  stock  up  does  not  let  him 
lose  sight  of  this  point.  Substitution  has  been  practically 
eliminated.  The  good  will  of  the  dealers  makes  competition 
helpless. 

The  cultivation  by  these  manufacturers  of  a  broad,  intelligent 
relation  with  the  retailer,  solves  many  of  the  wasteful  riddles 
of  distribution.  The  plan  promotes  a  frank,  friendly,  sincere 
co-operation  with  the  merchant.  The  retailer  is  recognized 
as  too  important  to  be  ignored,  as  unproductive  when  driven, 
as  uncertain  when  cajoled  and  bribed.  All  of  these  manufac- 
turers testify  to  this  fact;  as  you  treat  the  merchant  just  so 
he  will  respond. 

In  the  handling  of  their  advertising,  these  manufacturers 

have  worked  out  a  common  policy  which  arouses  none  of  the 

antagonism   which   many   national  campaigns    have 

Dealer     stirred    among   retailers,   but    actually    secures    co- 
Avoided^  operation  from  the  dealer  to  its  ends  and  purposes. 

These  manufacturers  keep  rigidly  away  from  em- 
ployment of  their  national  advertising  as  a  device  to  force  the 
sales  to  dealers.  Instead  he  is  shown  that  the  campaign  is  an 
auxiliary  power  which  he  can  use  to  good  advantage.  He  is  not 
awed  and  frightened  into  buying  by  circulars  which  captionize 
the  alleged  selling  arguments:    "We  are  reaching  and  influenc- 


126        ADVERTISING  AS  A  BUSINESS  FORCE 

ing  5,000,000  people  and  are  spending  $50,000  for  you.  Hurry, 
stock  up!"  Instead,  quietly,  calmly,  but  forcibly  they  say: 
"This  publicity  will  surely  influence  the  men  and  women  of 
your  locality.  It  will  arouse  their  desire  for  our  goods.  You 
and  you  alone  can  change  this  desire  into  actual  profitable 
sales." 

Nothing  is  left  to  the  dealer,  however,  which  the  producers 
themselves  can  shoulder.  The  "follow-up"  campaign  is 
planned  as  carefully  as  the  display  advertising.  The  interval 
required  for  putting  an  inquiring  prospect  in  touch  wuth  a 
retailer  is  reduced  to  as  short  a  period  as  the  mails  make  possible. 
Inquiries  are  answered  the  same  day  they  are  received. 

How  does  this  affect  the  dealer? 

In  a  previous  article,  the  development  of  the  retailer  from 
the  storekeeper  to  merchant  was  traced,  and  the  process  by 
which  in  too  many  cases  he  had  been  forced  back  to  storekeeper 
again.  In  contrast,  the  retailers  of  these  six  manufacturers 
have  become  real  merchants  once  more.  They  are  forcing 
the  issue  in  selling.  They  are  not  buying  more  or  less  blindly. 
Instead  each  works  out  and  shapes  a  merchandising  program 
of  his  own. 

The  broad  policies,  the  friendly  attitude,  and  the  sincere 
efforts  of  the  producing  concerns  have  entirely  removed  one 
source  of  worry,  the  attempt  of  the  manufacturer  to  encroach 
upon  their  domain.  This  has  occupied  so  much  of  the  dealer's 
attention  and  consumed  so  much  of  his  energy  that  looking 
after  his  business  has  often  become  an  incidental  matter. 

From  each  of  these  six  "new  school"  manufacturers  I  secured 
the  names  of  twenty-five  retailers  on  their  books.  These  one 
hundred  and  fifty  merchants  were  all  customers  of  the  various 
manufacturers  and  were  within  a  circuit  which  I  had  mapped 
out  for  the  study  of  the  problems  in  distribution  dealt  with  in 
these  articles. 

The  educational  partnership-efforts  of  the  producers  showed 
results  in  a  very  decided  way.  With  but  a  few"  exceptions  the 
retailers  were  found  to  be  doing  the  largest  business  in  their 
respective  territories,  while  their  selling  expenses  were  exceed- 
ingly moderate.  Free  from  "manufacturer  problems"  and 
able  to  concentrate  all  of  their  activities  upon  selling  they  had 
developed  their  trade  remarkably. 

Without  exception,  they  were  "cashing-in"  on  the  national 
campaigns  of  the  producers.     They  knew  how  to  do  this  with- 


THE  "REGULAR"  RETAILER  127 

out  losing  their  identity.    They  connected  their  stores  with  the 

advertised  goods  by  endorsing  the  advertiser's  claims  for  his 

wares.     They  focussed  their  "desire"  which  the  man- 

Cashing-in  ufacturer  created,  and  at  the  same  time  placed  them- 

n']  I  selves  above  the  merchandise.  They  were  reinforcing 
Campaign  the  producers'  selling  efforts  by  their  own  individual 
energies.  Even  in  the  preparation  of  their  advertis- 
ing they  did  not  use  the  manufacturer's  words;  they  rephrased 
his  arguments  in  their  own  distinctive  fashion. 

And  the  next  and  final  factor  in  distribution,  the  consumer, 
has  been  educated  by  these  saner  retail  methods  into  better 
buying.  He  has  been  weaned  away  from  the  bargain  idea, 
from  the  shopping  habits  which  the  retailer  himself  is  usually 
responsible  for. 

When  the  merchant  co-operates  with  the  manufacturer, 
intelligently  and  willingly,  two  powerful  forces  are  combined 
which  insure  the  maximum  selling  at  a  minimum  expenditure 
of  energy  and  money.  Demand  and  supply  in  themselves 
will  not  regulate  buying  and  selling  satisfactorily.  The  eco- 
nomical distribution  of  goods  from  manufacturer  to  consumer, 
by  way  of  the  retailer,  must  be  based  upon  a  systematic,  direct, 
intelligent  plan  which  invests  each  factor  with  a  responsibility 
and  brings  tliem  all  into  co-operation  to  that  end. 

THE  RELATIONS  OF  THE  MANUFACTURER  WITH  THE  RETAILER 

Among  the  most  conspicuous  of  the  advertising  relations 
between  the  "regular"  retailer  and  the  other  parts  of  the  sell- 
ing system  is  the  group  of  methods  for  inducing  re- 
ffeZp"  03  tailers  to  push  advertisers'  goods  known  under  the 
a  Part  of  general  term  of  "dealer  help."     Roughly,  this  term  is 
Plans"^  used  to  cover  any  effort  made  by  the  national  adver- 
tiser, whether  he  be  a  manufacturer  or   a  jobber, 
to  help  the  dealer  convert  into   sales   the  consumer-interest 
created  by  the  national  advertising  campaign. 

"Dealer  help"  takes  widely  different  forms,  but  through 
them  all  runs  the  attempt  to  have  the  national  advertiser's 
interests  represented  when  the  actual  sales  transaction  induced 
by  the  advertising  takes  place. 

The  "dealer  help"  relations  between  the  national  advertiser 


128       ADVERTISING  AS  A  BUSINESS  FORCE 

and  the  "regular"  retailer  can  be  no  better  illustrated  than 
they  are  in  the  case  of  the  Procter  &  Gamble  Company  in  its 
recent  attempt  to  launch  a  new  cooking  fat  under  the  name 
of  Crisco.    The  story  is  told  as  follows  by  R.  Bigelow  Lockwood : 

*The  Story  of  Crisco,  the  new  cooking  fat  that  has  made 

butter  "infamous,"  has  as  its  dominating  character  a  certain 

individual  about  whom  very  little  is  known  outside 

o/crisco  ^^  those  who  have  made  his  study  their  specialty;  the 

retail  grocer. 

In  the  scramble  to  "reach  the  consumer,"  manufacturers 
of  products  selling  through  grocers  have  been  prone  to  forget 
that  the  grocer  is  the  mouthpiece  between  them  and  the  person 
who  uses  the  goods.  The  fact  remains  that  grocers  and  their 
solicitors  know  their  customers  so  well  that  it  is  safe  to  say  that 
the  ordinary  retail  grocer  can  sell  seven  out  of  ten  customers 
any  brand  of  food  he  wants  to.  Granted  that  a  consumer, 
influenced  by  an  advertisement  in  the  general  magazines,  asks 
for  a  certain  product,  the  grocer  is  able  in  most  cases  to  sub- 
stitute something  else  if  he  wants  to,  for  the  simple  reason 
that  the  customer  knows  him  and  trusts  his  judgment. 

To  illustrate  just  one  case  where  this  relation  between  grocer 
and  customer  offsets  the  influence  of  advertising.  The  Acme 
Tea  Company  of  Philadelphia,  a  chain  of  nearly  250  stores, 
sells  four  times  as  much  Acme  Baking  Powder  as  it  does  Royal. 
Next  to  nothing  has  been  spent  on  advertising  the  former  to 
consumers,  and  probably  $500,000  per  annum  has  been  spent 
on  the  latter. 

When  a  manufacturer  reaches  grocers  he  reaches  their  cus- 
tomers. Creating  a  demand  on  the  part  of  the  consumer  is 
important,  but  beware  lest  the  tendency  be  to  overestimate 
the  consumer  end  of  securing  active  co-operation  with  the 
dealer.  Work  on  the  dealer  is  the  missing  link  in  modern 
selling  methods;  or  if  not  actually  missing  it  is  often  the  weakest 
link  in  the  chain.  Every  manufacturer  has  to  cross  a  certain 
bridge  —  and  that  bridge  is  the  retailer,  provided  his  product 
is  one  which  must  be  sold  through  this  channel. 

The  manufacturers  selling  a  product  through  the  medium 
of  the  retail  grocer  must  convey  tivo  messages;  one  to  the 
consumer  about  Quality,  and  an  entirely  different  one  to  the 

*Advertising  and  Selling,  May  1912,  p.  65. 


THE  "REGULAR"  RETAILER  129 

grocer  about  Profit.  If  a  consumer,  and  we  are  speaking  now 
of  the  housewife,  could  remember  a  manufacturer's  message 
and  repeat  it  verbatim  it  would  hold  not  the  slightest  particle 
of  interest  for  the  grocer.  The  grocer  must  be  sent  a  message 
which  cannot  be  entrusted  to  the  consumer  —  a  message 
regarding  Profits  which  will  make  him  push  the  manufacturer's 
goods.  The  consumer  cannot  be  expected  to  convey  this 
message;  there  is  no  reason  why  she  should,  and  it  would  not 
be  the  best  policy  to  let  her  know  it  anyway. 

The  logical  campaign  is  to  reach  both  grocers  and  consumers  — 
but  reach  the  grocers  first.  Thus  when  launching  a  new 
grocery  product  the  dealer  campaign  should  be  started  at 
least  thirty  days  before  general  advertising  begins. 

Now  perhaps  you  are  thinking  what  all  this  has  to  do  with 
Crisco.  The  answer  is  just  this:  Before  we  take  up  the 
actual  story  of  the  product  it  is  necessary  to  thoroughly  under- 
stand the  actual  field  conditions  and  the  relations  which  exist 
between  the  three  corners  of  the  triangle — manufacturer,  grocer, 
and  consumer.  Once  this  relationship  is  established  we  shall 
be  able  to  follow  clearly  each  move  in  the  Crisco  Campaign. 

In  the  way  of  enlightenment  regarding  the  character  and 
importance  of  the  retail  grocer  I  am  indebted  to  the  C.  M. 
Wessels  Co.  of  Philadelphia  and  to  Mr.  Paul  Findlay,  the 
New  York  manager  of  the  company,  and  a  recognized  authority 
on  grocery-store  management  and  other  matters  of  general 
and  specific  detail  about  the  retail  grocery  business. 

Should  there  by  chance  be  an  isolated  reader  who  does  not 
know  what  Crisco  is  then  let  me  advise  him  to  ask  his  wife. 
For  the  benefit  of  those  not  so  fortunate  as  to  possess  wives, 
Crisco  is  a  wholesome  cooking  fat  made  entirely  from  edible 
vegetable  oils  by  a  secret  process.  It  is  also  a  Procter  & 
Gamble  product. 

When  Procter  &  Gamble  fired  their  opening  gun  at  the 
retail  grocers  and  dealers  the  following  letter  came,  in  the 
usual  course  of  procedure,  to  the  hands  of  a  Mr.  Hjermstad, 
proprietor  of  a  general  merchandise  store  at  Chippewa  Falls, 
Wis. 

"Cincinnati,  Ohio, 
"Dear  Sir:  December  12,  1911. 

"We  are  expressing  you  to-day,  charges  prepaid,  six  packages 
(25-cent  size)  of  Crisco.  Please  accept  these  packages  with  our 
compliments  —  they  are  given  to  you  absolutely  free. 


130        ADVERTISING  AS  A  BUSINESS  FORCE 

"Our  national  advertising  campaign  on  Crisco  begins  in 
January,  when  large  advertisements  appear  in  practically  all 
of  the  leading  magazines,  especially  in  the  household  publi- 
cations which  are  so  largely  read  by  housekeepers. 

"  We  want  you  to  have  Crisco  in  stock,  so  that  you  can  supply 
the  first  demand  this  advertising  will  create  among  your 
customers.  It  will  be  big  advertising  and  the  magazines  will 
be  read  in  several  million  families.  You  will  have  calls  for 
Crisco  and  so  will  every  other  grocer  who  sells  to  a  good  family 
trade.  Sell  the  six  cans,  and  then  order  what  further  supply 
you  need  from  your  jobber. 

"The  price  is  as  follows: 

"  1  case,  (36  cans  each),  $7.50  per  case;  5  cases  (36 cans  each), 
$7.45  per  case;  10  cases  (36  cans  each),  $7.40  per  case. 

"We  enclose  copy  of  our  January  advertisement,  which 
we  feel  sure  you  will  read  with  much  interest. 

"At  the  present  time  the  jobbers  only  have  Crisco  in  the 
25-cent  size,  the  same  that  we  have  sent  you,  but  after  the  first  of 
the  year  we  will  be  in  a  position  to  supply  Crisco  in  50-cent 
and  $1.00  sizes  also. 

"Any  further  information  you  may  desire  will  be  promptly 
given  you.  "Yours  respectfully, 

"  The  Procter  &  Gamble  Distributing  Co." 

Mr.  Hjermstad  replied  to  this  letter  as  follows : 

"The  Procter  &  Gamble  Distributing  Co., 
"  Cincinnati,  Ohio. 
"Gentlemen: 

"We  have  received  the  six  cans  of  Crisco,  forwarded  to  us 
by  express  in  accordance  with  your  circular  letter, dated  the  12th. 

"While  we  appreciate  your  kindness  in  sending  us  the  six 
cans  free  of  charge,  and  recognize  the  spirit  which  prompted 
you  to  present  us,  entirely  unsolicited,  with  so  generous  a  gift, 
we  cannot  conscientiously  act  upon  your  suggestion  to  place 
an  order  with  our  jobber  for  your  product. 

"At  your  quoted  price  of  $7.50  per  case  of  36,  25-cent  cans, 
each  can  of  Crisco  would  cost  us  nearly  21  cents.  It  costs  us 
close  to  18  per  cent,  to  do  business,  which  would  leave  us  a 
profit  of  less  than  one  cent  per  can. 

"We  call  it  bad  business  to  ask  a  merchant  to  handle 
your  goods  on  such  a  basis  of  profit. 


THE  "REGULAR"  RETAILER  131 

"We  trust  your  advertising  campaign  will  not  be  a  disap- 
pointment to  you  and  that  the  hundreds  of  thousands 
Not  a  of  dollars  you  will  thus  spend  will  not  be  entirely 
living  wasted.  Personally,  we  think  if  part  of  that  money 
for  the  were  spent  with  the  grocer  in  the  way  of  better  profits 
Retailer   to  him,  the  result  would  be  far  more  satisfactory  to 

both  manufacturer  and  dealer. 
"Anyway,  we  know  it  is  time  for  the  retail  grocer  to  wake 
up  and  protest  against  the  unfair  treatment  accorded  to  him 
by  so  many  of  the  national  advertisers  of  the  day  who  want 
to  make  of  him  a  mere  automaton  for  the  vending  of  their 
wares,  with  little  or  no  compensation  for  services  rendered; 
the  customer  simply  puts  the  money  in  the  slot  and  the  manu- 
facturer gets  it  all. 

"Yours  truly, 
"  The  Success  Store  Co., 
"Per  O.  P.  K.  H.,  Secretary." 

By  this  it  might  be  taken  to  infer  that  Mr.  Hjermstad  had 
a  grievance.  Also  that  something  was  wrong  with  the  Crisco 
selling  scheme  to  provoke  such  an  attitude  on  the  part  of  a 
distributor. 

Mr.  Paul  Findlay,  who  was  conducting  a  department  under 
the  name  of  "Hy  Credit,"  in  the  Twin-City  Commercial  Bulletin, 
for  the  benefit  and  uplift  of  the  retail  grocer,  received  these 
letters  from  Mr.  Hjermstad  with  the  request  to  look  into  the 
matter. 

With  the  arrival  of  this  correspondence  Mr.  Findlay  realized 
its  vast  importance.  Here  was  a  situation  existing  between 
manufacturer  and  dealer  staged  to  take  advantage  of.  Hasty 
action  might  waste  the  opportunity.  Good  judgment,  on 
the  other  hand,  might  easily  result  in  great  and  widespread 
betterment  for  both  maker  and  distributor. 

Fundamentally  the  Crisco  selling  scheme  was  wrong.  Taken  as 
an  average,  20  per  cent,  is  a  fair  profit  for  a  grocer  to  make 
on  a  product,  but  by  charging  the  grocer  $7.50  per  case,  and 
fixing  his  selling  price  at  $9,  the  profit  to  the  grocer  was 
limited  to  16f  per  cent. 

Consider  this  if  you  please.  The  Crisco  Campaign  had 
only  just  started,  on  the  wrong  basis  to  be  sure,  but  still 
there  was  ample  time  to  work  some  change.  What  was  the 
remedy? 


132        ADVERTISING  AS  A  BUSINESS  FORCE 

A  brief  analysis  of  some  representative  Procter  &  Gamble 
products  will  point  it  out. 

Take  Ivory  Soap,  Large  Ivory,  as  the  10-cent  cakes  are 
called.  Large  Ivory  was  planned  as  a  10-cent  seller.  Present- 
day  costs  are  as  follows:  Single  box,  $7;  5  boxes,  $6.92; 
10  boxes,  $6.85;  25  boxes,  $6.80.  Selling  at  10  cents,  the 
margins  on  these  costs  are  30  per  cent.,  30.80  per  cent.,  31.50 
per  cent,  and  32  per  cent.  These  are  certainly  generous  margins 
on  an  article  nearly  as  staple  as  sugar. 

Now  Large  Ivory  may  be  cut  by  the  grocer,  with  the  following 
results.  If  sold  at  9  cents,  the  grocer  retains  margins  of  22.22 
per  cent.,  23.11  per  cent.,  23.88  per  cent.,  and  24.44  per  cent. 
If  sold  at  3  for  25  cents  the  scale  drops  below  the  line  of  safety 
with  margins  as  follows:  15.96  per  cent.,  16.92  per  cent., 
17.76  per  cent.,  and  18.36  per  cent. 

Procter  &  Gamble  had  thus  always  made  it  possible  on  all 

their  products  for  the  dealer  to  realize  liberal  margins  —  goods 

for  which  at  the  same  time  a  steady  market  had  been 

How  the    created    through    general    advertising.      Procter   & 

Corrected  Gamble  had  always  given  dealers  their  goods  on  a 

basis  where  honest  margins  could  be  made  when  sold  at 

the  fixed  standard  price,  but  what  did  the  dealers  do.^^     The  3 

per  cent,  or  4  per  cent,  of  natural-born  cutters,  together  with 

an  unfortunately  large  percentage  of  dealers  who  do  not  do 

enough  business  to  correctly  compute  their  margins,  destroyed 

the  plan  by  taking  advantage  of  its  liberality. 

The  result  was  that  when  Procter  &  Gamble  were  ready  to 
launch  Crisco  a  plan  was  shaped  to  head  off  the  minority 
from  price-cutting  instead  of  attempting  to  co-operate  with 
the  majority;  those  who  will  take  and  keep  an  honest  margin 
when  it  is  offered. 

The  selling  scheme  which  Procter  &  Gamble  launched  and 
which  caused  all  the  trouble  was  the  very  simple  one  of  setting 
a  price  to  the  dealer  which  allowed  such  narrow  margin  that 
even  the  blind  could  see  their  loss  if  they  attempted  to  cut. 
In  their  attempt  to  force  the  dealer  to  maintain  the  advertised 
price  they  had  incurred  his  enmity. 

This  plan  fixed  the  possible  margins  on  Crisco  as  follows: 
On  one  case  purchased,  16f  per  cent.;  on  five  cases,  17.22  per 
cent,  plus;  on  10  cases,  17.77  per  cent.  plus.  Thus  the  biggest 
purchaser  was  prevented  from  making  a  legitimate  margin, 
right  from  the  start.     He  was  up  against  a  stone  wall,  for, 


THE  "REGULAR"  RETAILER  133 

remember,  Crisco  was  advertised  to  the  consumer  at  a  fixed 
price  per  can. 

All  this  Mr.  Findlay  reaHzed  —  and  more.  He  realized 
that  Procter  &  Gamble  had,  perhaps  very  naturally,  been  de- 
ceived by  the  noise  of  the  few  into  forgetting  the  silent,  intelli- 
gent many  who  figured  right,  retained  fair  margins,  and  plugged 
ahead  honestly,  content  with  the  legitimate  profit  allowed  them. 

There  was  only  one  thing  to  do  —  and  if  done  instantly  the 
day  might  be  saved.  The  price  to  the  dealer  must  be  reduced 
30  cents  per  case,  so  that  the  smallest  buyer  could  realize  his 
full  20  per  cent,  profit. 

To  the  everlasting  credit  of  Procter  &  Gamble,  who  through 
the  entire  period  had  really  been  anxious  to  work  with  the 
dealer,  the  price  on  Crisco  was  reduced,  not  30  cents  but 
50  cents  per  case,  with  the  following  results:  1  case  yields  the 
grocer  a  profit  of  22.22  per  cent,  plus;  5  case  lots  22.77  per  cent, 
plus;  10  case  lots  23.33  per  cent.  plus. 

Thus  a  wrong  selling  scheme  was  changed  into  one  which 
yielded  the  grocer  a  liberal  margin  of  profit  and  changed  his 
attitude  into  one  of  interest  and  co-operation. 

Do  not  be  deceived  into  thinking  that  this  argument  against 
price-cutting  is  a  sweeping  protest  against  the  entire  system 
of  price-reduction.  Manufacturers  and  retailers  alike  are  up 
against  this  question  —  "How  far  is  it  legitimate  to  go  in 
price-reduction  on  special  occasions?" 

It  is  quite  true  that  certain  articles  are  handled  for  less  than 
cost  of  doing  business,  yet  the  statement  cannot  be  made  that 
they  do  not  yield  a  net  margin.  Other  articles  pay  heavy 
gross  percentages,  yet  there  is  nothing  to  prove  that  there  is 
anything  left  net,  after  they  have  been  handled. 

In  the  matter  of  price  regulation  the  best  guide  is  the  judgment 
of  the  careful  merchant  —  an  educated  judgment.  Price- 
cutting,  on  special  occasions,  requires  cool-headed  calculation. 
But  to  return  to  Crisco. 

Having  decided  to  reduce  the  price  to  dealers  there  yet 
remained  something  else  to  be  done  —  to  reach  the  distributors 
with  the  message  and  to  establish  a  new  and  closer  harmony  of 
relations  between  manufacturer  and  retailer.  And  to  gain 
this  end,  to  talk  to  these  distributors  in  their  own  language 
and  through  mediums  which  would  carry  the  message 
of  Crisco  home,  it  was  finally  decided  to  begin  a  trade 
paper  campaign.     .     .     . 


134        ADVERTISING  AS  A  BUSINESS  FORCE 

The  complaint  of  Mr.  Hjermstad,  which  was  representative 
of  grocers  everywhere,  proves  just  this:  "UnwiUing  service 
is  never  good  service,"  and  had  Procter  &  Gamble,  through 
the  expenditure  of  a  great  amount  of  money  advertising  to  the 
consumer,  finally  forced  grocers  to  handle  Crisco  the  price  paid 
for  the  distribution  would  have  been  excessive. 

It  costs  less  to  make  grocers  want  to  handle  a  product  than 
it  does  to  try  and  force  them  to  do  so.  When  a  grocer  buys 
a  product  because  he  is  convinced  of  its  merit  and  because  it 
shows  him  a  good  profit  he  buys  to  sell  it.  If  he  is  forced  into 
buying  against  his  will  he  may  hand  it  across  the  counter  when 
it  is  called  for,  but  he  certainly  will  not  be  likely  to  push  it. 
Get  the  grocer's  interest  and  the  business  is  won.  Allow  him 
a  fair  profit  and  he  keeps  customers  buying  the  product  that 
yields  him  a  fair  margin. 

This  Procter  &  Gamble  case  brings  out  the  point  which 
remains  uppermost  through  the  records  of  any  case  of  inducing, 
forcing,  or  helping  the  retailer.  That  point  is  the  fact  that 
what  the  retailer  is  most  interested  in  is  a  chance  to  make 
money  and  retain  his  self-respect  as  a  merchant.  Anything 
that  helps  him  to  do  this  is  really  "dealer  help,"  and  whatever 
wheedles  him  into  pushing  goods  on  which  the  profit  is  small 
for  the  mere  increasing  of  producer's  sales  may  work  for  a 
while,  but  ultimately  it  is  apt,  not  only  to  fail,  but  to  become 
a  positive  obstacle  to  the  retailer's  interest  in  selling  the  goods. 

DEALER   LITERATURE 

"Dealer  help"  is  of  almost  countless  types  and  new  forms 
are  continually  being  devised.  The  most  common  type  of  all 
is  what  is  known  as  "dealer  literature." 

So  much  "dealer  literature"  is  now  being  put  out  that  it 
is  a  grave  question  whether  this  form  of  appeal  to  the 
dealers,  in  spite  of  its  directness,  is  not  one  of  the  most  diffi- 
cult to  make  effective.  This  type  of  appeal  to  the  dealer  as 
it  is  viewed  by  the  dealer  himself  is  suggestively  described 
in  the  following  record  kept  by  Garrett  Byrnes,  a  druggist  in 


THE  "REGULAR"  RETAILER  135 

Maplewood,  N.  J.  It  is  in  the  form  of  a  six-day  diary  in 
which  this  suburban  dealer  sets  down  his  impressions  of  each 
piece  of  "dealer  Hterature"  as  it  is  received.  The  vivid  moral 
of  this  recital  is  the  fact  that  the  "dealer  literature"  which 
is  effective  is  that  which  is  well  above  mediocrity  both  in 
its  message  and  in  its  form. 

*We  do  have  our  thoughts  about  the  mass  of  "dealer  lit- 
erature" that  reaches  us  —  we  dealers.  Occasionally  we 
experience  the  reaction  that  results  in  our  boosting 
Six  Days  ^^^  manufacturer's  goods.  Sometimes  we  content 
gi^'s  Mail  ourselves  with  merely  thinking  sarcastically  about  the 
schemer  who  foozled  so  miserably  when  a  day's 
investigation  outside  the  beloved  office  would  have  set  him 
right  and  have  enabled  him  to  put  in  our  hands  a  pamphlet, 
a  price-sheet  or  a  folder  that  would  put  us  "on  our  toes." 
I'm  glad  to  be  able  to  get  this  hearing  in  Printers^  Ink.  I 
have  tried  to  be  fair  and  to  record  the  actual  impressions  of 
specific  pieces  of  matter. 

There  is  still  another  consideration.  We  dealers  aren't 
all  waiting  to  toss  the  folder  or  whatnot  on  the  well-known 
junk  heap  which  fable  says  lies  outside  our  back  door.  On 
the  contrary,  and  I  am  speaking  for  many,  many  other  dealers 
I  know,  we  look  to  the  manufacturers  to  furnish  us  ever  and 
anon  with  suggestions  that  will  help  us  sell  more  goods  and 
thus  be  more  prosperous. 

Every  dealer  worth  while  knows  that  out  of  his  morning's 
mail  he  may  gain  a  new  idea,  bringing  with  it  a  little  more 
enthusiasm,  generated  by  the  advertising  man's  genius.  We 
are  more  than  ready  to  put  in  a  new  article  or  a  new  line  if 
we  are  given  data  by  which  we  can  measure  its  probable  worth 
to  us  in  dollars,  cents,  and  our  customer's  good-will. 

First  Day 

1.  A  neat  little  condensed  letter  from  the  Rat  Biscuit 
Company,  bulking  small  in  the  centre  of  a  large  white  sheet 
with  no  superfluous  words,  no  ink  wasted  telling  me  of  the 
superiority  of  their  goods.  What  is  said  is  everything  I  want 
to  know.  An  enclosed  post-card  is  a  blank  order  for  one 
dozen,  one  free  and  a  window  display. 

*Printers  Ink,  November  9,  1911,  p.  24. 


136        ADVERTISING  AS  A  BUSINESS  FORCE 

Having  a  small  suburban  business  I  calculate  a  dozen  is  a 
fair  order  for  me.  My  windows,  not  fronting  on  Broadway, 
I  can  occasionally  let  them  to  the  manufacturer  at  cut  rates. 
The  manufacturer  gets  five  feet  of  window  space  for  a  week 
and  I  get  a  package  of  goods  worth  ten  cents.  We  retailers 
will  do  these  things  better  some  day  and  charge  "union" 
rates  for  good  window  space. 

The  letter  was  so  short  I  could  not  help  reading  it.  That 
caught  me. 

Time :  half  minute  to  read  letter,  half  minute  to  read  card,  ten 
cents  profit  and  perhaps  a  little  more  business. 

2.  A  post-card  (I  always  read  post-cards)  stating  that 
Dr.  Doan's  Directory  of  the  United  States  will  soon  instruct 
the  people  that  they  need  kidney  medicine  and  the  retailer 
is  requested  to  stock  up  in  time  for  the  rush. 

If  I  could  approve  this  class  of  goods  as  being  of  benefit 
to  my  patrons  I  would  like  the  advance  notice  that  direct 
advertising  was  to  be  done,  and  would  at  least  be  on  the  lookout 
for  increased  demand.     One  minute  wasted. 

III.  Another  post-card  from  a  fountain-pen  company  asking 
me  to  write  them  for  their  proposition.  Why  not  send  the 
proposition  first  time.'*  No,  I  won't  write  them.  Time 
wasted,  half  minute. 

IV.  The  "Certificate"  from  the  Florence  Manufacturing 
Company  is  a  very  clever  little  sheet  in  colors,  six  good  jokes 
and  as  many  funny  pictures,  many  paragraphs  on  the  superi- 
ority of  the  goods  and  reasons  for  the  dealer  selling  them. 
About  five  lines  of  real  meat :  "Always  buy  in  dozen  packages; 
always  redeem  certificates;  three  certificates  exchanged  for 
five  brushes;  six  certificates  exchanged  for  ten  brushes." 

This  is  all  I  want  to  know  about  it. 

Ten  minutes  to  read,  three  minutes  to  sort  the  wheat  from 
the  chaff,  one  minute  to  think  it  over.  Fourteen  minutes 
wasted. 

V.  "Another  Vaseline  Preparation"  is  the  headline  on 
a  single  sheet  from  the  Chesebrough  Company,  accompanied 
by  a  cut  of  the  package. 

"White  Vaseline  and  Quinine."  Why,  yes,  I'll  need  that. 
Why  wasn't  it  made  years  ago? 

VI.  Colgate's  goods  are  all  right  and  the  profit  they  allow 
and  maintain  is  fair.  Fair  treatment  from  a  manufacturer 
makes  their  announcements  worth  reading.     I  read  them. 


THE  "REGULAR"  RETAILER  137 

Summary:  Twenty  minutes  gone  in  one  morning  reading 
ads.  Five  minutes  profitably  spent  and  fifteen  minutes  and 
much  ink  wasted. 

Second  Day 

I.  Samples  of  cigar  pockets,  in  which  to  enclose  cigars 
when  selling  them,  from  the  Racine  Paper  Goods  Company. 
These  made  a  bulky  package  that  indicated  a  waste  of  time. 
One  glance,  however,  showed  my  name  and  address  neatly 
printed  on  each  pocket.  This  was  interesting  and  worth 
looking  into. 

The  quality  was  good.  The  price,  terms,  transportation 
cost  to  me  and  all  particulars  I  would  need  or  care  to  know 
were  concisely  stated  in  the  letter  accompanying  samples. 
I  was  in  doubt  about  nothing  and  needed  to  ask  them  no 
questions.  The  letter  told  it  all  and  there  could  be  no  ground 
for  misunderstanding. 

Attached  to  the  letter  were  twenty-four  styles  of  printing 
to  select  from,  and  an  order  blank.  Had  my  name  not  been 
printed  on  the  pockets  I  would  probably  have  given  the  propo- 
sition little  attention.  I  decided  to  order  a  quantity  as  sopn 
as  I  could  use  them. 

Five  minutes  for  the  above. 

II.  "An  Exclusive  Agency  Proposition  That  Draws  Trades, " 
and  a  hand  pointing  to  1,  More  Business;  2,  Better  Prices; 
3,  Better  Profits;  4,  Satisfied  Customers;  5,  Success,  would 
have  insured  my  looking  inside  the  folder  sent  out  by  the 
Seamless  Rubber  Company  even  though  I  had  not  already 
taken  the  agency  for  their  goods.  The  exclusive  sale  of  a 
profitable  article  of  real  merit  should  be  sought  for  by  any  retailer, 
and  he  will  read  a  reasonable  amount  of  advertising  matter 
in  regard  to  it. 

According  to  the  folder,  "One  druggist  discovered  that  his 
business  was  largely  built  up  as  a  result  of  selling  goods  no 
other  druggist  in  town  could  handle."  "Kantleek  goods 
guaranteed  for  two  years."  This  should  be  an  inducement 
capable  of  satisfying  any  one  and  as  long  as  the  quality  and 
guaranty  hold  and  the  prices  are  maintained  I  am  willing  to 
give  time  and  attention  to  this  or  any  other  good  thing.  Five 
proofs  of  ads  in  many  publications  notify  the  agent  to  get 
ready  for  business  and  the  non-agent  that  he  is  losing  a  good 
thing. 


138        ADVERTISING  AS  A  BUSINESS  FORCE 

III.  Belle  Mead  Sweets'  Christmas  notice.  A  single  sheet 
neatly  printed  asking  for  the  placing  of  Christmas  order  by 
November  20th  and  promising  only  fresh  and  not  stored  goods. 
It  warns  the  retailer  against  placing  his  order  extra  early  and  get- 
ting stored  goods.     This  is  a  notice  to  Belle  Mead  agents  only. 

Coming  as  it  does  from  a  house  whose  goods  have  always 
been  satisfactory  and  whose  treatment  of  the  retailer  could 
not  be  better,  I  am  glad  to  read  it  and  accept  its  statements 
at  face  value. 

The  value  of  advertising  matter  is  increased  many  fold 
when  backed  up  by  honest  treatment  from  the  house  sending  it. 

Five  minutes  for  the  Belle  Mead  notice  and  ten  minutes 
for  the  Kantleek  ad,  and  I  feel  more  than  ever  like  pushing 
those  goods. 

Summary:  Twenty  minutes  this  day  with  good  matter 
and  about  one  to  dispose  of  several  patent  medicine  ads  that 
are  not  worth  mentioning. 

Third  Day 

I.  A  Package  of  samples  for  an  asthma  cure  together  with 
a  letter  and  a  10  x  15  sign.  One  minute  is  wasted  in  looking 
it  over  and  no  time  at  all  in  throwing  it  away.  I  have  neither 
the  time  nor  the  desire  to  foist  upon  my  patrons  countless 
new  "patents,"  either  with  or  without  samples,  unless  de- 
manded by  them. 

II.  Sample  sheets  of  very  neat  embossing  done  by  a  clever 
little  device  by  Roovers  Bros.,  Brooklyn.  This  is  interesting, 
but  the  twice  fifty-seven  styles  make  it  hardly  possible  for  a 
small  retail  drug  business  to  handle  them  with  any  satisfac- 
tion. In  selling  from  the  list  there  would  be  a  distinct  loss, 
as  on  one  twenty-five-cent  embosser  there  would  be  a  margin 
of  seven  cents  to  pay  for  selling,  writing  order,  stationery,  stamp, 
and  delivering.  This  might  be  satisfactory  to  the  stationer 
but  not  to  the  druggist.     Time,  ten  minutes. 

Fourth  Day 

I.  A  letter  from  a  music  publisher  with  sheet  containing 
bars  of  popular  songs.  Selling  sheet  music  does  not  appeal 
to  me  at  this  time  and  I  doubt  if  the  average  retail  druggist 
can  do  it  profitably,  if  all  of  the  time  required  for  it  is  considered. 
One  minute. 

II.  A  letter  from    a  house  selling    dyes  offering  several 


THE  "REGULAR"  RETAILER  139 

kinds  of  advertising  matter  either  with  or  without  an  order. 
This  reminds  me  that  I  have  some  of  their  goods  not  moving 
very  well.  I  will  write  for  ad  matter  and  perhaps  both  the 
manufacturer  and  myself  will  profit  by  it.  Three  minutes 
for  this. 

Fijth  Day 

I.  A  letter-size  printed  sheet  from  the  Gillette  Sales  Com- 
pany, stating  amount  of  advertising  being  done  by  them  and 
proof  of  ad  to  appear  in  twenty -eight  different  publications. 
As  the  Gillette  Company  protects  the  price,  we  will  do  our  part. 
Five  minutes. 

II.  A  twenty -four-inch  sheet  with  ten  halftone  reproductions 
of  as  many  different  window  displays  made  by  means  of  the 
"Oaken- Wood  Window  Fixture"  plans.  These  are  very 
interesting  and  enable  one  to  make  an  excellent  window  display 
in  a  very  short  time.  A  money-maker  and  a  time-saver 
combined.     I  need  that. 

Sixth  Day 

I.  The  "Yellow  Label,"  a  new  and  presumably  periodical 
publication,  by  E.  E.  Dickinson  Company,  with  cuts  of  their 
office  and  distillery,  labors  through  four  letter-size  pages  to 
tell  the  retailer  of  the  superiority  of  their  goods.  As  I  am 
satisfied  of  this,  after  having  sold  the  goods  for  many  years, 
I  do  not  wish  to  spend  fifteen  minutes  reading  about  it. 

II.  Gaudily  colored  ads  showing  premiums  offered  by  the 
Wilham  Wrigley  Company  for  quantity  orders.  A  half  hour 
at  least  to  read.  The  increased  price  asked  to  obtain  the 
premiums  would  more  than  pay  for  them.  I  will  buy  my 
gum  and  furniture  of  their  respective  dealers. 

III.  A  cut  of  a  new  style  nursing  bottle  on  the  envelope 
containing  letter  and  prices  excited  my  interest. 

The  letter  gave  thirteen  good  features  of  the  article,  to- 
gether with  prices  and  argument  in  favor  of  its  use.  The  fact 
that  a  baby  could  puncture  the  nipple  without  spilling  the 
milk  seemed  a  good  point,  and  I  decided  to  obtain  a  sample 
from  the  Dairy  Nurser  Department,  Clarksburg,  W.  Va. 

IV.  An  envelope  full  of  circulars,  with  prices,  etc.,  of  wines 
and  liquors.  Bang!  W^e  have  too  much  close  at  hand  without 
going  to  Ohio  and  Indiana  for  it. 

V.  "Think  of  the  other  ninety-five"  on  the  outside  of  an 


140        ADVERTISING  AS  A  BUSINESS  FORCE 

envelope  containing  ofiFers,  order  blanks,  advertisement  proofs, 
etc.,  etc.  Too  many  and  too  much  to  read.  From  the  Paul 
Rieger  Company,  California,  perfumers.  Is  doubtless  a  true 
statement.  Not  five  of  each  one  hundred  persons  use  an  appre- 
ciable amount  of  perfume,  and  with  all  the  advertising  done 
by  this  company  I  have  yet  to  have  a  bona  fide  call  for  their 
goods. 

Several  children  with  the  sample  fever  have  written 
them,  giving  my  name  as  a  dealer.  But  this  trade  does  not 
pay  the  rent. 

Order  blanks  enclosed  with  advertising  matter  are  suggestive, 
and  also  time-savers  to  the  retailer.  It  is  a  "do  it  now" 
reminder.  A  letter  that  looks  short  is  very  apt  to  be  read. 
The  sight  of  a  full-sized  letter  sheet  filled  with  print  or  type- 
writing does  not  look  inviting  w^hen  many  such  are  received 
each  day. 

I  have,  in  fact,  mentioned  only  about  half  of  the  ad  matter 
received  in  six  days. 

If  the  manufacturer  will  name  the  article,  state  its  use  and 
good  qualities  concisely,  giving  price  and  terms  and  explain 
method  of  protecting  price,  the  average  druggist  can  quickly 
decide.  Long  drawn  out  descriptions  and  suggestions  are 
apt  to  be  thrown  away. 

About  three  quarters  of  the  time  the  dealer  spends  on  ad 
literature  is  given  to  worthless,  or  useless,  matter.  And  yet 
he  is  benefited  by  a  reasonable  perusal  of  all  that  comes  his 
way.  In  looking  over  it  quickly  or  slowly  I  find  one's  judgment 
upon  it  is  practically  the  same.  And  the  druggist  is  necessarily 
becoming  a  keener  business  man. 

Let  the  manufacturer  furnish  a  good  article,  and  main- 
tain a  price  that  allows  a  reasonable  profit,  and  accord 
square  treatment. 

WINDOW   DISPLAYS 

Another  type  of  "dealer  help"  which  has  grown  very  popu- 
lar within  the  past  few  years  is  the  putting  out  of  window 
displays  by  the  national  advertiser.  The  dealer's  window  and 
its  value  to  the  national  advertiser  is  a  comparatively  recent 
discovery,  and  some  of  the  national  advertisers  have  made 
very  profitable  use  of  this  form  of  "dealer  help."  The  dealer 
himself,  in  many  cases,  has  shared  in  the  profits  thus  secured. 


THE  "REGULAR"  RETAILER  141 

One  of  the  most  successful  of  these  national  advertisers  is 
the  Victor  Talking  Machine  Company,  whose  experience  is 
thus  described  by  Ellis  Hansen,  in  charge  of  the  window  dis- 
play work  of  the  company : 

*  ...  A  well-dressed  show  window  may  be  compared 
with  a  friendly  greeting  to  a  prospective  customer.  Everybody 
looks  into  the  window,  either  consciously  or  unconsciously, 
and  retail  dealers  should  be  educated  by  manufacturers  to 
realize  how  many  friends  a  store  gains  through  well-dressed 
and  interesting  window  displays. 

A  dealer  pays  one  half  of  his  store  rent  for  location  and 
window  space,  and  it  was  to  aid  Victor  dealers  in  deriving  all 
the  possible  benefits  from  their  windows  that  the  Victor  Com- 
pany inaugurated  its  window  display  department. 

While  the  Victor  Company  is  probably  not  alone  in  realizing 
the  tremendous  influence  that  good  windows  exert  in  stimu- 
lating trade,  they,  nevertheless,  have  had  the  courage  of  their 
convictions,  and  are  maintaining  a  large  and  costly  department 
for  designing  and  building  exclusive  Victor  trims,  and  ex- 
clusively demonstrating  how  this  important  method  of  retail 
advertising  can  be  converted  into  a  national  advertising  prop- 
osition of  great  magnitude. 

About  ten  years  ago,  when  I  entered  the  music  business  as 
a  window  designer,  I  was  instantly  drawn  toward  the  talking 
machine.  The  Victor  appealed  to  me  like  a  modern  Aladdin's 
lamp,  and  offered  to  the  designer  a  field  as  wide  as  the  entire 
world  of  music,  and  the  opportunity  of  arranging  timely  win- 
dows for  any  and  all  seasons. 

Fortunately,  my  firm,  Sherman,  Clay  &  Co.,  of  San  Francisco, 
did  not  restrain  me  in  regard  to  designing  and  planning  these 
displays,  and  in  a  short  time  the  window  devoted  to  the  Victor 
became  the  most  popular  of  all  our  windows,  and  requests  for 
photos  came  from  everywhere. 

Window        Even  before  I  was  called  to  Camden  to  take  up  the 

Displays  of  work  for  the  Victor  dealers  in  general,  the  Victor 

the  Victor  Company  had  for  years  advised  their  dealers  to  take 

ra^Hngr    proper  care   of   their   show  windows,   and    to    give 

window  displays  more  attention,  even  offering  prizes 

for  the  best  Victor  windows.     They  followed  closely  the  window 

*Printers'  Ink,  January  19,  1911,  p.  57. 


142        ADVERTISING  AS  A  BUSINESS  FORCE 

advertising  of  Lyon  &  Healy,  and  of  Sherman,  Clay  &  Co.,  the 
window  displays  of  these  two  stores  proving  to  them  that  all 
Victor  dealers  should  be  educated  into  this  method  of  adver- 
tising. 

It  was  the  original  intention  to  have  me  travel  around  the 
country,  build  displays  for  each  dealer  upon  whom  I  called, 
talk  the  value  of  window  trimming,  and  to  arouse  sufficient 
enthusiasm  in  each  dealer  to  make  him  realize  the  real  value 
and  importance  of  his  window.  With  the  assistance  of  an 
artist  and  a  boy  and  in  a  very  small  room  in  one  of  the  factory 
buildings,  I  designed  six  windows,  photos  of  which  I  expected 
to  leave  with  each  dealer  for  their  future  guidance,  after  I  had 
arranged  one  display  for  him. 

Then,  after  the  six  windows  were  completed,  we  advanced 
to  the  idea  of  cataloguing  these  displays  and  offering  to  sell 
the  material  to  our  dealers  at  cost  price.  It  took  us  several 
months  to  get  the  department  ready,  but  during  that  time 
the  idea  of  ready-made  window  displays  was  thoroughly  ex- 
ploited in  the  Victor  house-organ,  The  Voice  of  the  Victor, 
and  when  we  issued  our  catalogue,  success  was  instantaneous. 
The  orders  have  rapidly  increased  each  month,  and  at  the 
present  time  we  have  a  large  force  of  assistants  and  helpers, 
and  occupy  the  entire  floor  of  one  of  the  large  Victor  buildings. 

These  displays  are  sold  at  actual  cost.  Our  dealers  were 
quickly  convinced  that  the  very  low  price  we  asked  was  not 
an  expense,  but  a  first-class  investment,  and  we  now  have 
the  confidence  of  many  hundred  dealers  throughout  the  country 
to  the  extent  that  they  have  signed  our  standing  orders  for  all 
Victor  displays  issued  during  the  next  twelve  months.  We 
sell  most  of  the  windows  for  five  dollars,  but  if  they  were  made 
singly  they  could  not  be  prepared  for  many  times  that  amount, 
for  we  have  in  our  employ  some  of  the  best  artists  and  show-card 
writers  to  be  found,  and  insist  that  these  designers  take  all  the 
time  that  their  work  requires. 

To  design  and  manufacture  window  displays  in  quantities  is 

by  no  means  an  easy  task.     In  the  first  place,  these  displays 

must  be  striking.     While  most  persons  are  fascinated 

^/«ai  a    by  a  pretty  window,  beauty  alone  is  not  enough  to 

Disv"^   make  a  successful  display.   Each  window  must  not  only 

Must  Be  tell  an  interesting  story,  one  that  will  be  understood 

without  too  much  mental  effort,  but  it  must,  like  all 

other  advertising,  create  a  new  desire  to  possess  the  article  dis- 


THE  "REGULAR"  RETAILER  143 

played.  The  buying  public  is  too  busy  to  linger  in  front  of  a 
show  window,  but  if  your  point  is  well  illustrated,  so  that  it  can 
be  understood  at  a  glance,  it  will  unconsciously  create  sufficient 
interest  in  most  people  to  cause  them  to  stop,  and  this  is  the 
first  and  main  object  of  a  show  window. 

On  the  other  hand,  these  displays  must  be  inexpensive. 
It  would  be  unfair  to  the  smaller  dealers  to  design  and  manufac- 
ture expensive  displays  that  only  the  larger  stores  could  afford 
to  buy. 

Another  hard  problem  is  to  prepare  displays  for  shipment. 
When  it  is  taken  into  consideration  that  we  are  not  only  ship- 
ping window  displays  to  nearly  every  point  in  the  United 
States,  but  to  Europe,  South  America,  Canada,  Hawaiian 
Islands,  and  even  to  China  and  Japan,  it  will  readily  be  seen 
that  if  the  material  is  too  bulky  or  too  heavy  the  cost  of  trans- 
portation will  be  entirely  out  of  proportion  to  the  entire  cost 
of  the  display.  We  issue  these  new  displays  every  month,  and 
great  care  is  taken  to  make  them  as  compact  and  as  easy  to 
assemble  as  possible. 

A  large  show  window,  containing  electric  lights  and  every- 
thing else  that  goes  to  make  up  a  modern  shop  window,  is 
erected  in  our  shop;  we,  therefore,  see  each  new  display  just 
as  it  will  appear  in  the  Victor  dealers'  windows. 

The  success  of  the  window  display  plan,  however,  depends 
largely  on  the  co-operation  of  the  dealers,  many  of  whom  have 
written  us,  offering  valuable  suggestions. 

Nearly  all  dealers  who  originally  bought  our  displays  have 
bought  again  and  again,  and  have  shown  a  great  deal  of  interest 
and  patience  in  setting  up  our  displays  in  windows  of  odd 
shapes.  Our  displays  have  been  so  simplified  that  it  requires 
very  little  effort  to  put  them  together,  but  at  first  we  under- 
estimated the  difficulties  with  which  many  of  our  dealers  had 
to  contend.     .     .     . 

Only  a  few  months  after  we  sent  out  our  catalogue  of  the 
first  six  ready-made  windows,  the  plan  was  introduced  in 
Europe  by  the  Gramophone  Company,  Ltd.,  and  on  my  recent 
trip  abroad  I  had  the  satisfaction  of  seeing  some  of  these  dis- 
plays not  only  in  England,  Germany,  and  France,  but  in  smaller 
countries  like  Norway  and  Denmark.  In  the  United  States 
several  firms  have  taken  up  the  idea,  and  one  company  is 
closely  following  out  the  plan  inaugurated  two  years  ago  by 
the  Victor  Company.     .     .     . 


144        ADVERTISING  AS  A  BUSINESS  FORCE 

DEALER  HELP   THROUGH   A   SELLING   SYSTEM 

"Dealer  help"  has  possibilities  for  development  far  beyond 
these  more  common  forms  of  sales  "boosting."  In  some  cases 
the  plans  of  "dealer  help"  go  so  far  as  to  make  them  an  actual 
basis  of  co-operation  between  the  producer  and  the  various 
factors  in  the  selling  system. 

There  is  perhaps  no  better  illustration  of  an  entire  distribu- 
tion system  based  on   "dealer  help"  than  the  selling  system 
worked  out  for  handling  Sealshipt  oysters.     Nor  is 
Gdting  the  ^.j^^  interest  of  this  illustration  lessened  by  the  fact 

JJealer  to  .  "       , 

Work  into  that  one  serious  defect  in  the  system  made  it  nec- 
the  Sales  gggary  to  materially  modify  the  original  plan.     This 
plan  is  thus  described  in  its  main  features  by  Kirk 
S.  Pickett: 

*The  Sealshipt  Oyster  System  has  about  35,000  dealers 
who  act  as  agents  for  Sealshipt  oysters.  Although  it  is  in  the 
advantageous  position  of  being  in  a  certain  sense  a  monopoly, 
its  marked  success  in  developing  its  market  must  be  credited 
partly  to  its  peculiarly  efficient  dealer  work. 

It  says  to  the  dealer:  "You  are  only  one  of  several  dealers 
selling  our  oysters  in  your  city.  But  you  are  not  in  competition 
with  one  another.  You  are  co-operating  with  one  another 
to  develop  more  business  for  each  of  you.  You  are  in  co- 
opetition,  not  in  competition.  What  competition  there  is,  is 
of  the  kind  that  you  all  can  fight  to  common  advantage.  The 
oyster  sold  from  the  wooden  tub  is  your  only  competitor. 
Remember  —  co-opetition,  not  competition  between  Sealshipt 
dealers." 

"Co-opetition"  is  a  word  the  Sealshipt  concern  coined  to 
convey  its  understanding  of  how  the  Sealshipt  dealers  should 
act  toward  one  another 

The  dealer  looms  large  as  a  factor  in  the  seUing  machinery 
of  the  Sealshipt  oysters.  He  is  the  centre  of  tlie  Sealshipt 
advertising  campaign.  Upon  him  depends  the  success  of  a 
vigorous  consumer  campaign  in  the  magazines  and  the  news- 
papers  

*  Printers   lid;  January  19,  1911,  p.  .57. 


THE  "REGULAR"  RETAILER  145 

It  was  only  a  few  years  ago  that  a  Wisconsin  inventor  worked 

out  a  plan  of  a  small  refrigerator  box  for  shipping  oysters  under 

perfect  sanitary  conditions.     It  was  looked  upon  as  a 

Tlie      great  boon  for  the  inland  states,  where  good  oysters 

Qy^^  had  been  hard  to  get  because  of  the  difficulties  of 

System  transportation.  L.  C.  Brooks  made  a  business  of 
shipping  Sealshipt  oysters  from  Norwalk,  Conn.  The 
demand  has  grown  and  the  Sealshipt  Company  has  been 
acquiring  larger  and  larger  sources  of  supply.  Its  beds,  ag- 
gregating 140,000  acres,  proved  insufficient  and  it  went  over 
to  Great  South  Bay  and  bought  tens  of  thousands  of  acres 
of  Blue  Point  beds.     .     .     . 

The  company  is  assuring  its  dealers  that  it  is  in  position 
to  supply  all  the  orders  which  they  may  give.  It  rests  with 
them  to  develop  the  demand  in  co-operation  with  the  com- 
pany's advertising  and  in  "  co-opetition  "  with  the  other  dealers 
handling  Sealshipt. 

There  is  nothing  that  is  mysterious  about  the  procedure  of 
this  dominating  concern.  Its  striking  results  may  be  ascribed 
to:  first,  the  idea  of  a  refrigerator  container;  second,  to  its 
manner  of  licensing  the  jobber  and  the  dealer,  and  third,  to 
its  vigor  in  creating  a  consumer  demand  by  advertising  and 
by  urging  the  dealer  to  extend  his  co-operation. 

The  refrigerator  container  is  called  a  Sealshipticase.  With- 
out this  the  Sealshipt  system  would  have  no  "talking  point" 
and  no  point  of  distinction  setting  it  apart  from  the  concerns 
that  sell  oysters  in  wooden  tubs. 

Under  the  license  the  dealer  agrees  to  sell  the  oysters  only 
from  the  Sealshipticases  and  to  observe  hygienic  conditions. 
He  also  agrees  not  to  sell  Sealshipt  oysters  below  25  per  cent,  over 
cost.     He  is  free  to  increase  this  margin  as  much  as  he  wishes. 

Under  the  Sealshipt  system  there  is  no  opportunity  for  the 

jobber  to  tamper  with  the  stock.     The  pressed-steel  container 

An  Attempt  ^?  ^^^^^^  by  the  shipper  on  the  coast  and  when  the 

to  Make    jobber  receives  the  oysters  he  transfers  the  container 

the  Selling  to  a  dealer  Sealshiptor  without  breaking  the  seal  of 

Steps  Work  iliQ  container.     Seals   are  not  furnished  to  jobbers. 

together  j^^^^  retailer  and  no  one  else  breaks  the  seal.  The 
company  guarantees  that  its  oysters  are  secured  from  the  beds 
and  packed  in  containers  before  night  and  that  they  will  be 
delivered  to  the  dealer  anywhere  in  the  United  States  with  a 
flavor  unimpaired. 


146        ADVERTISING  AS  A  BUSINESS  FORCE 

The  dealer  agrees  to  keep  his  oysters  exposed  for  sale  only 
in  the  Sealshipticases,  which  are  attractive  cases  of  metal, 
designed  to  be  an  ornament  to  the  store.  He  is  urged  to  make 
window  displays  with  the  cases  as  a  central  feature.  There 
seems  to  be  no  disposition  to  hold  a  club  of  fear  over  the  dealer's 
head.  Rather  he  is  spurred  on  to  renewed  activities  by  having 
explained  to  him  regularly  through  bulletins  and  booklets  how 
Sealshipt  dealers  have  increased  their  business  from  100  to 
300  per  cent,  a  year. 

The  company  has  an  "inspiration"  booklet,  kept  revised 
up  to  date,  entitled  "The  Sealshipt  Oyster  System.  How 
It  Links  Shipper,  Dealer,  Consumer  for  the  Benefit  of  All." 
It  is  packed  full  of  facts  about  getting  sales;  it  explains  the 
system's  plan  of  work;  it  contains  a  list  of  cities  where  Seal- 
shipt jobbers  operate;  it  outlines  the  extensive  advertising  plans. 

Larger  advertising  the  coming  sea.son  is  promised  than  ever 
before.  Among  the  magazines  on  the  list  for  continuous  large 
copy  are  the  Delineator,  the  Woman  s  Home  Companion,  Good 
Housekeeping,  National  Food  Magazine,  the  Saturday  Evening 
Post  and  the  Ladies^  Home  Journal.  Big  newspaper  space 
will  appear  in  the  larger  cities  of  the  United  States  and  Canada. 
A  few  of  the  cities  in  which  Sealshipt  advertising  will  appear 
are  St.  Louis,  Cincinnati,  Detroit,  Denver,  Des  Moines,  St. 
Paul,  Toronto,  Minneapolis,  Buffalo,  Portland,  Me.,  Portland, 
Ore.,  Manchester,  Seattle,  Montreal,  Salt  Lake  City,  Memphis, 
Louisville,  Hartford,  Worcester,  Wheeling,  Dallas,  Ft.  Worth, 
Atlanta,  Milwaukee,  Rochester,  Omaha,  San  Francisco  and 
Los  Angeles. 

The  dealer's  name  is  printed  at  the  bottom  of  the  ad.  If 
there  is  more  than  one  dealer,  all  the  names  are  given. 

In  addition  to  this,  advertising  copy  is  furnished  the  dealer 
which  he  may  run  at  his  own  expense.  The  importance  of 
the  dealer's  identifying  his  store  with  the  Sealshipt  campaign 
is  urged.  If  some  of  the  ads  are  too  large  for  one  dealer  to 
pay  for,  he  is  advised  to  club  with  the  other  dealers  in  his 
town  and  all  share  the  expense. 

This  copy  —  magazine,  newspaper  or  street  car  —  is  educa- 
tional to  a  degree.  The  reader  is  made  to  understand  why 
oysters,  till  the  advent  of  the  Sealshipt  system,  did  not  lend 
themselves  to  sanitary  shipping  inland.  The  novel  features 
of  the  Sealshipt  system  are  pointed  out.  Some  one  with  a 
knack  for  writing  copy  that  creates  hunger  —  "appetite  copy" 


THE  "REGULAR"  RETAILER  147 

it  has  been  called  —  has  had  to  do  with  this  campaign.  And 
the  interesting  thing  is  that  this  appetite  is  created  for  the 
Sealshipt  variety  of  oyster  and  not  for  that  sold  other- 
wise.    ... 

L.  C.  Brooks,  who  has  been  chiefly  responsible  for  the  growth 
of  the  Sealshipt  business,  writes  Printers''  Ink  as  follows : 

"One  of  the  principal  changes  that  will  take  place  in  our 
campaign  at  the  beginning  of  the  new  season  in  the  fall  of 
1911  will  be  the  handling  of  oysters  in  the  shell,  in  a  much 
larger  way,  as  well  as  the  sale  of  opened  oysters,  in  which  we 
are  largely  engaged  at  present.  We  think  our  method  of  price 
maintenance  and  co-operation  with  the  dealer  —  the  spirit 
and  policy  which  we  term  '  co-opetition '  —  is  a  very  vital  part 
of  the  sales  end  of  our  business."* 

EXPANDING  THE  FIELD   OF  DEALER  HELP 

The  limits  of  "dealer  help"  are  by  no  means  reached  by 
the  development  of  a  selling  system  in  which  each  factor 
co-operates  in  the  extension  of  sales.  The  idea  of  close  co-opera- 
tion between  the  various  factors  in  the  selling  system  is 
capable  of  very  wide  expansion.  Even  the  small  retailer  to-day 
constantly  faces  this  fact;  his  problems  of  internal  organization 
may  be  individual,  but  when  he  buys  and  sells  he  is  dealing 
'v\dth  problems  of  distribution  in  which  his  work  is  only  one  link. 
His  one  safety  is  in  knowing  whether  the  part  he  plays  is  being 
played,  not  merely  well,  but  in  the  best  possible  way.  C.  C. 
Casey,  writing  under  the  title  of  "Dealer  Help  Which  Counts," 
suggests  that  the  national  advertiser  is  in  a  position  to  help  the 
retailer  put  himself  on  a  sounder  commercial  basis  by  assisting 
him  in  working  out  really  effective  methods  of  record  keeping  and 
cost  accounting.  In  this  Mr.  Casey  puts  his  finger  on  one  of  the 
most  sensitive  places  in  the  problems  of  the  present-day  retailer. 

*The  sequel  to  this  story  is  found  in  Printers'  Ink,  December  14,  1911,  p.  18. 
A  number  of  retailers  abused  the  system  by  substituting,  in  the  retail  containers 
(Sealshipticases),  oysters  which  were  not  up  to  the  company's  standard. 
Hence  it  was  necessary  to  go  one  step  further  and  seal  the  oysters  in  packages, 
to  be  opened  only  by  the  final  consumer.  The  remainder  of  the  system  was 
left  unchanged. 


148        ADVERTISING  AS  A  BUSINESS  FORCE 

*A  certain  retailer  in  Indiana  was  prevailed  upon  by  a  big 
manufacturer,  a  national  advertiser,  to  stock  a  line  of  goodi 
he  had  not  previously  been  interested  in. 

The  manufacturer  played  strong  on  his  national  advertising, 
and  promised  to  tie  it  up  to  the  store  with  attrac- 

Where     tive  window  cards  and  a  campaign  in  the  newspapers 

^l^     of  the  little  city,  over  the  dealer's  own  name. 

Failed  ^^  the  strength  of  these  promises  and  expenditures, 
the  dealer  stocked  very  heavily,  on  long-time  credit. 
The  goods  moved  fairly  well  and  everything  seemed  lovely  for 
a  while.  But  before  the  bills  for  the  stock  came  due  the 
dealer  found  himself  financially  embarrassed.  Being  unable  to 
get  further  credit  or  to  borrow  from  his  bank,  he  went  broke. 

The  manufacturer  had  aided  this  dealer  to  push  the  new  line, 
had  given  the  regular  "dealer  co-operation"  at  big  expense, 
and  had  come  out  a  heavy  loser. 

The  dealer  didn't  know  he  was  getting  into  such  a  tight 
place  —  they  seldom  do  —  but  he  had  figured  that  the  advertis- 
ing would  help  him  to  overcome  some  pretty  bad  competition. 

It  wasn't  window  displays,  free  advertising,  nor  demonstra- 
tions, however,  which  this  dealer  needed  most.  WTiat  he  needed 
was  better  methods  of  knowing  the  condition  of  his  business. 

If  he  had  known  several  months  earher  that  he  was  getting 
into  such  a  tight  place  he  could  have  saved  himself. 

But  he  didn't  keep  any  books,  at  least  none  worthy  of  the 
name,  and  didn't  see  the  real  storm  till  it  broke  over  his  head 
and  "busted"  him  over  night. 

The  manufacturer  who  sells  through  dealers  is  successful 
only  in  proportion  to  the  success  of  his  dealers. 

Of  course,  a  dealer  handling  many  fines  could  sell  a  large 
quantity  of  one  kind  of  goods  and  very  little  of  any  other  kind. 
In  this  possible  but  not  probable  event  the  one  manufacturer 
would  profit  until  the  sheriff  sells  out  the  dealer. 

There  is  a  dealer  in  Michigan  who,  until  about  two  years  ago, 
had  just  an  ordinary  retail  grocery  business.  He  wasn't  really 
making  any  money;  he  wasn't  really  going  ahead. 

Like  most  retailers  who  are  not  successful,  he  had  a  lot  of 
petty  troubles  in  the  way  of  bills,  which  annoyed  him  some, 
at  times. 

One  day  he  began  wondering  if  all  retailers  were  hard    up. 


"Printers   Ink,  April  11,  1912,  p.  17. 


THE  "REGULAR"  RETAILER  149 

When  a  dealer  gets  to  feeliug  that  way  he  is  in  a  fair  way 
to  learn  something  —  if  he  is  not  a  dead  one. 

This  dealer  looked  about  among  retailers  in  Michigan, 
and  soon  came  to  the  conclusion  that  some  retailers 

How  a     were  successful ;    that  some  of  them  were  continually 

ff  /   /"'*  forging  ahead  —  making  money.        When  he  found 

Found     this  out,  he  began  asking  himself  why  the  successful 

Himself  ones  were  successful?  What  enabled  them  to  reach 
into  his  territory  and  draw  his  trade  away  from  him? 
As  he  investigated  further,  he  found  that  the  average  retailer 
doesn't  usually  know  so  very  much  about  his  business;  that  he 
doesn't  usually  know,  for  sure,  just  where  he  stands;  that  the 
average  retailer  runs  his  business  by  guess. 

He  found,  on  the  other  hand,  that  the  most  successful  retailers, 
the  ones  who  took  business  away  from  him,  had  complete 
information  on  their  sales,  their  purchases,  and  their  expenses, 
by  lines  of  goods,  by  departments,  by  clerks,  etc.,  every  day. 

When  he  learned  this  he  decided  to  eliminate  guessivork  from 
his  business,  and  to  provide  himself  with  the  information 
which  the  successful  dealers  provided  themselves  with. 

He  made  an  outline  of  all  the  information  he  knew  of  any 
successful  retailer  getting.  Then  he  went  to  his  books  and 
tried  to  get  the  same  information  about  his  business. 

But  the  information  wasn't  there.  His  bookkeeping  system 
wouldn't  give  it  to  him,  though  he  had  thought  his  system 
was  about  "the  real  thing."     His  accounts  didn't  account. 

Then  he  decided  that  he  would  have  a  bookkeeping  system 
that  would  give  him  the  information  he  needed.  But  he  didn't 
know  how  to  get  a  bookkeeping  system.  Of  course,  he  knew 
that  a  public  accountant  could  install  one,  but  he  had  visions 
of  enormous  charges  for  the  service. 

One  day  he  mentioned  his  problem  to  a  salesman  from  a 
big  Detroit  wholesale  house.  The  salesman  liked  the  idea 
and  promised  to  see  if  he  couldn't  get  his  house  to  help  the 
dealer  out. 

It  so  happened  that  the  manufacturer  had  just   installed 

a  number  of  machines  in  his  accounting  department  and  was 

about  to  lay  off  one  of  his  bookkeepers.     Instead  of 

a  Whole-  ^^^'^^o  ^1^1  off  he  was  sent  out  to  help  the  dealer  open 

sale  Bouse  a  set  of  books  which  would  give  him  the  information 

he  wanted.  The  dealer  insisted  on  a  complete  system. 

He  wanted  to  know  about  all  there  was  to  know  about  his 


150        ADVERTISING  AS  A  BUSINESS  FORCE 

business,  once  in  every  twenty-four  hours,  including  which 
clerk  sold  the  most  goods;  how  much  profit  he  made  on  each 
clerk's  sales;  which  lines  of  goods  sold  the  easiest;  how  much 
he  lost  through  each  of  a  score  of  leaks,  and  a  lot  of  other 
things. 

They  got  the  system  in  operation,  at  last,  and  the  dealer 
had  accounts  that  did  account.  But  the  system  immediately 
plunged  the  dealer  and  his  clerks  into  a  mass  of  extra  work 
that  made  them  all  work  nights. 

The  new  problem  was  solved  by  training  a  young  woman 
to  handle  the  bookkeeping  with  an  adding  machine  a^  an 
assistant.  The  machine  shortened  the  work  and  eliminated 
nearly  all  chances  for  mistakes. 

Within  three  weeks  the  dealer  was  getting  the  information 
he  wanted,  and  he  was  feeling  the  effects  of  that  information 
upon  his  ability  to  make  his  business  pay. 

In  one  year  he  increased  the  volume  of  his  business  300  per  cent. 

A  few  manufacturers  suffered  because  he  found  that  some 
lines  of  goods  didn't  pay  at  all.  He  threw  these  lines  out 
absolutely  and  refused  to  carry  them. 

But,  on  the  whole,  all  the  manufacturers  whose  goods  he 
carried  profited  by  his  success.  He  sold  more  of  each  of  the 
lines  he  carried. 

Manufacturers'  goods  are  passing  over  his  counter  in  greater 
volume  every  month.  He  has  become  a  bigger  and  a  better 
market  for  every  manufacturer  whose  goods  he  handles.  He 
has  become  a  safer  credit  risk. 

Recently  he  opened  a  second  store,  acquiring  the  stand 
of  a  "dead"  retailer  in  an  adjoining  town. 

If  every  retailer  in  the  United  States  could  be  changed 
to-morrow  from  what  this  man  was  two  or  three  years  ago 
to  what  he  is  to-day,  the  selling  power  of  the  retail  business 
in  the  United  States  would  be  doubled,  at  least. 

But  a  thousand  dealers,  with  good  business  ability  and  plenty 
of  life,  are  sleeping  soundly  within  one  hour's  ride  of  this  one 
dealer  who  awoke. 

There  is  something  more  the  matter  with  the  retail  business 
than  "incompetence"  or  "lack  of  capital."  It  is  deeper, 
further  back,  more  vital  than  that. 

Mercantile  agencies  say  more  retail  failures  are  due  to 
"lack  of  capital"  than  to  any  other  cause,  while  one  failure 
in  every  five  is  credited  to  "incompetence,"  but 


THE  "REGULAR"  RETAILER  151 

Attributing  failures  to  either  of  those  causes  is  hke  attributing 
a  fire  to  the  ruins  it  leaves. 

I  know  a  banana  peddler,  pushing  a  cart  through  the  streets 
of  St.  Louis,  who  does  a  larger  volume  of  business  on  a  capital 
of  $25  than  thousands  of  dealers  are  doing  on  a  capital  of 
$5,000.     He  turns  his  capital  every  day  at  a  good  profit. 

In  Illinois  there  is  a  dealer  who  does  a  business  of  $225,000 
a  year  on  a  $5,000  capital.  There  are  16,000  grocers  in  the 
United  States  with  $5,000  capital  who  average  less  than 
$25,000  gross  business. 

The  man  who  fails  on  $5,000  capital  in  four  or  five  years 
would  probably  "blow  up "  in  one  or  two  years  if  he  had  $25,000 
capital  —  if  he  used  the  same  methods. 

"Incompetence"  is  due  almost  entirely  to  lack  of  infor- 
mation —  not  to  lack  of  ability. 

Lack  of  information  in  the  retail  business  can  hardly  be 
due  to  anything  but  poor  bookkeeping  methods  —  accounts 
that  don't  account. 

Dealers  are  not  incompetent  as  a  class.  Most  of  them  are 
shrewd,  sensible,  able  fellows. 

Their  trouble  is  that  they  don't  really  know  the  results 
of  their  efforts.  They  waste  their  energy.  They  work  in 
a  circle  and  never  get  anywhere  ■ —  except  into  a  rut. 

Take  the  average  retailer  and  provide  him  with  a  complete 
statement,  every  morning,  of  the  previous  day's  business 
and  you  won't  know  his  store  in  a  year. 

But  if  he  doesn't  know  to-day  how  much  goods  he  sold  yester- 
day, and  how  much  he  has  on  hand,  he  isn't  able  to  direct 
his  energies. 

Unscrupulous  salesmen  from  unscrupulous  houses  come 
along,  and  —  by  the  aid  of  extra  discounts,  threatened  increases 
in  prices,  promises,  etc. — load  him  to  the  guards  with  unsalable 
goods. 

Who  suffers?     The  dealer  and  his  real  friends. 

If  manufacturers  and  wholesalers  would  give  their  dealers  a 

real  business  service,  they  would  get  more  co-operation 

^  ^p'"/^  from  the  dealer.       He  would  push  their  goods  with 

Help  for   ^1^  ^^^  might  —  and  he  would  be  in  a  better  position 

Retailers  to  push  them  intelligently. 

Dealers  do  not  need  tailor-made  window  displays 
and  hand-me-down  selling  plans  half  as  much  as  they  need 
bookkeeping  co-operation  and  advice. 


152        ADVERTISING  AS  A  BUSINESS  FORCE 

Many  people,  "bigger"  than  most  dealers  are  supposed 
to  be,  have  had  full-sized  bookkeeping  problems  that  they 
couldn't  solve. 

Conditions  surrounding  the  retail  business  make  the  book- 
keeping problem  easily  one  of  the  biggest  problems  the  retailer 
has  to  deal  with. 

Nine  tenths  of  them  have  proven  themselves  unable  to 
solve  the  problem.  They  need  help  on  that  end  of  their 
business. 

A  few  wholesalers  and  manufacturers  are  now  aiding  dealers 
to  solve  their  bookkeeping  problems.- 

Among  these  is  the  Simmons  Hardware  Company,  of  St. 
Louis.  That  company  has  saved  many  of  its  dealers  from 
certain  bankruptcy  by  aiding  in  the  laying  out  of  accounting 
systems  which  enable  dealers  to  find  out  how  they  really  stand. 

W.  D.  Simmons,  head  of  that  company,  recently  told  a  story 
of  how  he  snatched  a  hardware  dealer  from  certain  failure 
into  a  fair  promise  of  success  by  sending  a  bookkeeper  to  work 
out  a  system  of  accounts.  The  company  has  had  many 
such  cases. 

The  dealer  kept  accounts,  but  the  accounts  didn't  "account." 
It  was  like  putting  money  into  a  gold  brick  —  he  put  dowTi  part 
of  the  necessary  figures,  but  they  didn't  give  him  any  real 
information. 

The  Simmons  bookkeeper  analyzed  the  system  and  instructed 
a  girl  in  the  proper  handling  of  simple  double  entry  books 
which  he  opened  for  her.  Soon  the  owner  of  the  store  was  able 
to  get  information  which  enabled  him  to  build  a  future  into 
the  plans  of  his  business.  If  this  were  a  novel,  his  letter  of 
gratitude  would  make  Simmons  the  hero. 

Another  customer  of  the  same  house  allowed  matters  to 
go  so  far  before  he  woke  up  that  he  was  broke  before  he  knew  it. 

This  latter  hardware  man  kept  no  accounts  except  the 
invoices,  and  those  only  until  they  were  paid.  He  never 
really  knew  at  any  time  how  his  business  stood,  and  was  a 
very  much  surprised  man  when  his  creditors  closed  in  on  him. 

Being  unable  to  produce  a  statement  which  would  indicate 
ability  to  make  good,  he  couldn't  raise  the  needed  funds  on 
such  short  notice,  and  had  to  turn  his  business  over  to  his 
creditors. 

If  you  have  ever  seen  a  dealer  snatched  from  certain  failure 
into  sure  success  by  a  better  grasp  on  himself  and  his  business. 


THE  "REGULAR"  RETAILER  153 

you  won't  doubt  the  loyalty-producing  effect  of  this  kind  of 
dealer  help. 

It  makes  him  stick  and  work.  It  makes  him  plan.  It  makes 
him  see  the  value  of  the  other  dealer  helps.     It  opens  his  eyes. 

Wideawake  dealers,  with  the  full  grasp  of  their  business 
which  complete  records  give,  buy  in  smaller  quantities,  for 
that  is  the  tendency  of  scientific  buying,  but  they  buy  so  often 
that  they  are  a  mighty  profitable  outlet. 

Why  don't  the  manufacturers'  associations,  either  as  one 

national  organization   or   as    state   or   district    organizations, 

maintain  some  kind  of  a  service  department  to  help 

A  Service    ^j^g  dealer  get  the  inside  facts  about  his  own  business 

^To^Help    which  will  help  him  sell  more  goods.?      He  doesn't 

Retailers    need  information  about  the  manufacturer's  business 

and  the  manufacturer's  goods  half  as  much  as  about 

his  own  business. 

Why  don't  manufacturing  grocers,  for  instance,  work  out 
simple  yet  complete  systems  for  grocery  stores  and  urge  the 
grocers  to  find  out,  as  the  Michigan  dealer  did,  the  direction 
in  which  they  should  apply  their  energies.? 

Why  don't  hardware  manufacturers  work  out  systems  for 
the  hardware  dealer,  and  urge  him  to  find  out  every  night 
just  where  he  stands.? 

Why  don't  manufacturers  in  each  line  of  business  help  their 
particular  dealers  to  put  their  particular  businesses  on  a  scien- 
tific basis.? 

If  a  manufacturer  could  increase  his  own  sales  300  per  cent, 
in  each  of  the  200,000  grocery  stores,  by  teaching  the  grocer 
scientific  retailing,  wouldn't  it  be  worth  while.?  If  he  only 
did  it  in  1,000  or  100  stores,  wouldn't  it  fay? 

The  great  chain-store  organizations  and  the  few  really  suc- 
cessful one-man  stores  have  established  beyond  question  that 
scientific  management  'pays  in  the  retail  business. 

The  average  United  Cigar  Store,  for  instance,  does  about 
sixteen  times  as  much  business  as  the  average  cigar  store.     That 
is  1600  per  cent,  in  favor  of  scientific  retailing. 
fRd"^M       ^^  every  retailer  would  provide  himself  with   as 

Fads     niuch   information  about   his   sales,  expenses,  pur- 
chases, etc.,  as  the  United  Cigar  Stores  people  provide 
themselves  with,  there  would  be  a  wonderful  awakening  in  the 
retail  business. 

The  United  Company  Is  in  a  position  to  dictate  to  its  tTiou- 


154        ADVERTISING  AS  A  BUSINESS  FORCE 

sand  stores,  and  goes  a  little  further  than  "suggesting"  book- 
keeper methods.  If  any  United  Store  does  not  keep  proper 
records,  there  is  "something  doing"  from  the  home  office. 

Every  United  Store  knows  just  where  it  stands,  and  has 
records  to  "prove"  it.  It  must  pay,  for  the  United  is  said 
to  have  recently  declared  a  dividend  of  250  jper  cent. 

The  dealer  who  knows  the  exact  results  of  each  day's  efforts 
soon  eliminates  the  unscientific  methods,  the  inefficient  clerks, 
the  goods  that  won't  sell,  and  stops  the  leaks. 

He  is  soon  able  to  direct  his  energies  in  the  ways  that  make 
for  his  success  —  for  the  success  of  the  manufacturers  whose 
goods  he  handles. 

In  the  last  few  months  I  have  had  the  pleasure  of  seeing 
a  great  many  letters  from  retailers  who  have  tasted  the  delicious 
fruit  of  new  success;  who  have  seen  and  welcomed  greater 
success  ahead,  made  possible  by  a  better  grasp  on  their 
business. 

I  have  seen  them  extend  the  hand  of  sincere  business  grati- 
tude; the  kind  that  makes  them  want  to  spend  hours  of 
their  own  time  telling  other  men  of  what  you  have  done  for 
them. 

There  is  nothing  that  inspires  an  ambitious  man  more  than 
a  new  understanding  of  better  ways  of  gaining  the  goal  he  seeks. 
It  sharpens  his  mind  and  his  energies.  To  get  this  under- 
standing it  is  necessary  for  the  dealer  to  keep  complete  records 
of  every  transaction  of  his  business.  No  dealer  can  hope 
to  remember  everything. 

Most  dealers  say  they  can't  afford  to  Keep  the  records  they 
need.  They  don't  know  what  they  need  —  though,  in  their 
ignorance,  they  think  they  do. 

That  is  why  this  method  of  dealer  co-operation  is  not  an 
Aladdin's  lamp  to  be  rubbed  and,  Presto!  "the  dealer  forgets 
all  his  other  lines  to  push  yours."  Oh,  no !  The  dealer  problem 
is  a  real  for-sure,  full-sized  problem. 

Making  dealers  see  the  advantage  of  more  facts  in  their 
business  is  a  grown-up  job  for  a  full-sized  man  —  for  a  real 
advertising  man. 

Some  men,  and  bright  men  at  that,  who  read  this  article  will 
say  it's  tommyrot  "because  dealers  do  know  their  business." 
But  let  them  go  up  against  the  retailer  as  some  men  I  could 
mention  have  been  and  are  going  up  against  him,  and  they 
will  change  their  mind. 


THE  "REGULAR"  RETAILER  155 

I  have  seen  the  inside  of  a  campaign  which  has  made  a  thou- 
sand dealers  say  they  didn't  know  —  and  they  think  they  are  as 
smart  as  the  average.     And  they  are. 

It  does  cost  a  Httle  money  to  keep  books.  But  it  costs  the 
dealer  more  not  to  know  the  results  of  each  day's  efforts. 

The  Michigan  dealer  mentioned  in  this  article  thought  he 
could  not  afford  to  keep  books,  at  first.  But  the  books  he 
keeps  are  worth  $10,000  a  year  to  him  in  actual  profits  —  the 
increased  business  and  decreased  expenses  made  possible  by 
the  information  he  gets  amount  to  that  much  in  profits. 

The  Mayfield  Dairy  Company,  of  England,  requires  each 
of  its  742  stores  not  only  to  know  where  they  stand,  but  to 
report  the  exact  sales  of  each  line  of  goods  to  the  home  office 
every  night.  It  seems  to  pay  them  to  keep  records  —  the  com- 
pany last  year  paid  SOO  per  ceiit.  on  its  capital  stock. 

Eventually  every  dealer  will  do,  on  his  own  account,  what 
the  Michigan  dealer  did.  The  time  is  coming  when  every 
retailer  will  have  to  be  a  real  business  man.     .     .     . 


REVIEW   QUESTIONS  —  CHAPTER   VI 

1.  What  is  meant  by  the  term  "regular"  retailer  as  it 
is  used  in  the  text.'^ 

2.  What  are  the  "newer"  types  of  retailer .f* 

3.  Why   do   the   advertising  problems  differ  for   the  two 
systems  supplying  these  two  outlets? 

4.  What  does  Mr.  Louis  consider  the  best  way  to  get  into 
the  retail  trade  of  the  country.'^     Do  you  agree  with  him.f* 

5.  What  are  some  of  the  most  common  forms  of  dealer  help.^* 

6.  What  was   it   that   made   it  necessary   to   change  the 
Sealshipt  system? 

PROBLEM  QUESTIONS  —  CHAPTER  VI 

1.  What  does  Mr.  Louis  mean  by  a  "properly  balanced 
selling  plan"? 

2.  What  was  WTong  with  the  original  Crisco  plan?     How 
was  the  trouble  corrected?     Was  this  the  only  way? 

3.  Can  you  find  any  common  faults  in  the  bad,  and  any 


156        ADVERTISING  AS  A  BUSINESS  FORCE 

common  merits  in  the  good  "dealer  literature"  described  in 
Mr.  Barnes's  diary? 

4.  Do  you  think  a  system  of  fines  and  inspection  could 
have  been  worked  out  to  keep  the  dealer  faithful  to  the  Sealshipt 
system?     What  is  to  be  said  for  and  against  this  idea? 

5.  How  would  a  manufacturer  of  washboards  benefit  by 
working  out  a  really  good  system  of  cost  keeping  for  hard- 
ware dealers  as  a  form  of  "dealer  helps"?  Would  the  same 
answer  fit  a  refrigerator  maker? 


CHAPTER  VII 

ADVERTISING  PROBLEMS  OF  THE  NEW  TYPES  OF  RETAILER 

HAVING  thus  discussed  some  phases  of  the  place  of  the 
"old"  or  "regular"  type  of  retailer  in  national  adver- 
tising campaigns,  let  us  turn  to  an  examination  of  the 
advertising  aspects  of  some  of  the  various  forms  of  retailer 
of  more  recent  development.  The  department  store,  the  chain 
store,  mail-order  retailer,  and  the  co-operative  commercial 
enterprises  are  of  comparatively  recent  growth,  and  each  of 
these  as  well  as  the  various  other  types  of  concentrated  or 
modified  retailing  method  introduces  new  problems  in  relation 
to  advertising  of  various  forms. 

In  the  case  of  each  of  these  types  of  retailing  we  shall  find 
ourselves  obliged  to  work  somewhat  in  the  dark  because  of  the 
almost  total  lack  of  compiled  data  covering  their  operations 
either  in  size  or  in  character. 

ADVERTISING    AND    THE    DEPARTMENT    STORE 

To  take  up  first  the  department  store,  we  are  confronted  at 
the  very  outset  with  the  fact  that,  whatever  may  be  known 
by  a  few  advanced  merchants  about  the  extent  of  department 
store  business  and  its  methods  of  operation,  little  of  a  reliable 
character  ever  has  been  published. 

In  the  seventies  there  were  three  notable  examples  of  what 
has  come  to  be  known  as  the  department  store;  these  being  the 
Marshall  Field  store  in  Chicago,  the  Wanamaker  store  in 
Philadelphia,  and  the  A.  T.  Stewart  store  in  New  York. 
Unfortunately,  no  statistical  record  has  been  kept  of  the  growth 
of  this  type  of  store,  nor  are  there  any  reliable  figures  showing 

157 


158        ADVERTISING  AS  A  BUSINESS  FORCE 

in  detail  either  the  number  of  stores  of  this  type  now  in  exist- 
ence, the  volume  of  their  business,  or  the  methods  of  purchase 
which  they  adopt. 

A  hst-preparing  company  in  New  York  offers  for  sale  a  pre- 
pared list  of  3,836  department  stores,  while  a  St.  Louis  ad- 
dressing  company  offers  to  sell  a  list  containing  the 

Baffling    names  of  3,912  such  concerns  in  the  United  States. 

Lack  of  From  this  it  would  appear  that  there  are  at  least 
Information  .        ,       _^    .      .   _  i  •   i 

3,800  stores  m  the  United  States  winch  rank  them- 
selves as  department  stores,  although,  of  course,  by  no  means 
all  of  these  are  stores  of  any  very  great  size. 

No  figures  have  been  prepared  showing  the  volume  of  business 
done  by  these  stores  as  compared  with  the  volume  of  business 
still  done  by  their  small  competitors.  It  is  estimated  that  in 
100  leading  cities  the  department  store  business  amounts  to 
more  than  $900,000,000  a  year.  In  Chicago  the  department 
stores  certainly  do  more  than  $100,000,000  worth  of  business, 
and  the  Marshall  Field  store  is  said  to  do  an  annual  business 
of  between  $30,000,000  and  $40,000,000.  In  New  York  it  is 
perhaps  a  safe  estimate  that  the  department  store  business 
amounts  in  volume  to  nearly  twice  that  of  Chicago,  while  in 
Philadelphia  the  department  store  business  certainly  is  three 
quarters  as  great  as  that  of  Chicago.  These  figures  are  simply 
estimates,  however,  and  there  is  little  which  can  be  brought 
forward  as  evidence  of  their  accuracy,  and  estimates  prepared 
by  half  a  dozen  estimators  probably  would  show  exceedingly 
wide  variation. 

The  case  for  the  New  York  department  store  as  a  means  of 

entrance  into  the  retail  markets  of  the  country  Is  well  put  in  a 

Ente  'n     ^^^^^^  ^^  articles  on  "Breaking  Into  the  New  York 

the  Retail  Market"  written  by  W.  R.    Hotchkin,   Advertising 

Trade     Director  of  Gimbel  Brothers,  New  York,  who  was  for 

1 hrougn 
the  Depart-  ten  years  advertising  director  for  John  Wanamaker, 
ment  Store  ^^^  York.     Mr.  Hotchkin  may  have  rather  too  large 
ideas  of  the  proportion  of  the  population  of  the  country  depend- 


NEW  TYPES  OF  RETAILER  159 

ing  on  the  New  York  department  stores  for  its  knowledge  of 
what  is  new,  but  he  puts  his  case  well.  The  following  quota- 
tions are  from  Mr.  Hotchkin's  articles: 

.  .  .  .  *0f  course,  there  are  many  commodities  that  can 
be  sold,  and  also  many  that  must  be  sold,  by  advertising  alone 
—  before  the  customer  starts  for  the  store. 

But  many  others  —  and  especially  new  articles  —  require 
demonstration  and  much  patient  explanation,  before  they 
secure  the  foothold  that  brings  people  to  a  store  to  ask  for  them. 

A7id  no  store  can  afford  to  stock  up  with  goods  that  nobody 
asks  for,  and  ivhich  it  requires  persistent  expert  effort  to  sell. 

Of  course  all  stores  want  to  sell  all  the  merchandise  they 
can.  They  must  have  many  manufacturers  producing  goods 
for  them.  They  are  always  glad  to  have  more  manufacturers 
seeking  their  ti-ade.  They  are  eager  to  find  new  things  that 
will  sell  well. 

But  a  department  store  is  not  a  jyhilanthropic  institution. 

The  buyer  of  a  department  store  must  see  ready  sale  for  all 
the  merchandise  he  buys.  No  buyer  who  does  not  buy  thus 
carefully  can  hope  to  hold  his  job.  He  \s  called  a  "buyer," 
but  he  must  be,  first  of  all,  a  seller,  .  .  .  and  he  must 
necessarily  seek  the  lines  of  least  resistance,  and  buy  ready 
sellers. 

The  manufacturer  must  undertake  tlie  burden  of  introduction. 

In  these  days  of  tremendous  advertising  the  dealer  is  not 
impressed  by  the  fact  that  the  manufacturer  is  burning  up 
hundreds  of  thousands  of  dollars  in  general  advertising.  The 
makers  of  well-known  commodities  are  doing  that  every  year. 

But  how  shortsighted  must  be  the  manufacturer,  after 
spending  $100,000  for  advertising  his  commodity,  if  he  will 
not  spend  a  few  thousand  more  to  make  the  whole  mvestment 
pay. 

I  have  no  new  plan  to  suggest  to  manufacturers;  but  I  want 
to  express  my  amazement  that  manufacturers  and  their 
advisers  are  continuously  trying  to  avoid  doing  the  one  thing 
that  experience  of  many  years  has  proven  to  be  the  royal 
road  to  selling  success. 

Just  recently  there  was  brought  to  me  a  manufacturer  who 
had  a   proposition   whereby  he   desired   to  invest   $2,000   in 

*Printers  Ink,  October  12,  1911,  p.  3. 


160        ADVERTISING  AS  A  BUSINESS  FORCE 

samples  to  be  given  to  our  customers;  but  he  demanded  orders 

for  $50,000  worth  of  his  product,  to  be  used  in  a  year.     Then 

he  wanted  big  display  space  for  his  demonstration. 

How  One       His  argument  was  that  we  should  show  some  con- 

Manufac-  fijence  in  his  product.     That  the  sale  would  be  easy. 

Wanted  to  after  what  he  was  going  to  do  for  us.     I   listened  to 

ETiter     his  story,  and  then  I  said : 

New  York      "My  dear  man,  you  ask  us  to  have  $50,000  worth 

of  confidence  in  a  scheme  in  which  you  have  none. 

You  want  us  to  believe  in  your  commodity  when  you  do  not 

believe  in  it  yourself.     All  the  gamble  must  be  ours,  while  you 

go  out  with  a  sure  thing." 

And  yet  this  man  was  a  representative  mamifacturer.  I 
have  talked  to  hundreds  who  expected  practically  the  same 
guarantee  from  the  store. 

This  man  had  a  good  commodity.  We  would  have  been 
glad  to  co-operate  with  him.  We  had  the  best  manager  in 
the  country,  in  his  line,  to  promote  the  proposition  for  us. 
I  told  him  I  was  sure  we  could  make  the  biggest  success  of  the 
scheme  that  could  be  made  anywhere;  that  we  would  go  into 
it  with  enthusiasm  and  energy;  that  we  would  probably  sell 
all  he  expected  us  to  sell;  that  we  would  get  him  the  desired 
publicity  and  introduction,  at  any  rate. 

But  we  refused  to  be  bound  by  a  silly  contract,  that  was 
of  no  value  to  him,  if  the  scheme  was  a  success,  and  which 
would  only  compel  us  to  sell  a  vast  quantity  of  his  goods  at 
a  loss,  if  it  was  a  failure,  and  thereby  ruin  the  whole  market 
for  him. 

Contracts  are  usually  boomerangs  —  as  people  learn  who 
try  to  use  them  as  weapons. 
On  the  other  hand: 

Some  years  ago  a  young  man  invented  an  appliance  for  keep- 
ing women's  clothing  in  good  order  at  home.    He  had  no  capital, 
except   enough   money  to   get  a  few  of  the  articles 
"^wrT^  manufactured.     He   was  working  in    a  small  store 
Succeeded  ^^^  gave  up  his  position  as  soon  as  he  found  that 
he  could   secure  space   in   the   larg-est  store  in  the 
city  for  the  demonstration  of  his  article.     He  did  the  demon- 
strating himself.     The  article  found  a  ready  sale.     The  store 
made  no  contract  with  him;  they  did  not  even  buy  his  mer- 
chandise until  it  was  sold.     He  placed  the  goods  in  the  store 
on  memorandum  and  sold  them  himself. 


NEW  TYPES  OF  RETAILER  161 

But  the  space  which  the  store  supplied  to  him  was  so  valuable 
that  his  business  increased  almost  as  rapidly  as  he  could  have 
the  article  produced.  He  also  found  that  his  location  in  this 
store,  which  was  of  national  reputation,  brought  his  article 
to  the  attention  of  dealers  all  over  the  country. 

In  three  months'  time  this  young  man,  without  capital, 
had  built  up  a  business  which  might  have  required  a  year  or 
more  if  he  had  used  the  methods  of  many  manufacturers. 
He  had  only  his  two  hands  and  a  possible  hundred  dollars 
to  begin  with,  yet  he  accepted  all  the  responsibility,  demanding 
nothing  from  the  store  but  a  small  counter  behind  which  to 
demonstrate  his  merchandise. 

This  young  man  had  the  whole  secret  of  success.  The  man 
who  has  $100,000  capital  may  simply  multiply  this  young 
man's  possibilities. 

The  advertising  campaign  is  most  important  to  the  man 
who  has  capital  to  invest;  and  the  appropriation  may  be  as 
small  or  as  large  as  he  is  able  to  pay  for.  But  not  less  than 
25  jper  cent,  of  his  appropriatioti  should  be  directly  applied  to 
deinonstrating  his  merchandise. 

New  York  retail  advertising  is  one  of  the  strongest  factors 
in  creating  a  national  reputation  for  any  commodity.  First, 
because  of  the  enormous  population,  which  within  the  twenty- 
five  mile  limit  is  probably  one  fifteenth  of  the  entire  population 
of  the  United  States.  Second,  because  there  are  continuously 
so  many  hundreds  of  thousands  of  visitors  from  all  over  the 
country  who  go  through  the  larger  New  York  stores.  Third, 
because  there  are  constantly  in  the  city  the  representatives 
of  the  big  stores  all  over  the  United  States  who  are  keen  to 
learn  about  new  things  that  are  being  introduced  in  New 
York  stores.  It  requires  only  a  moment's  consideration  for 
any  manufacturer  to  realize  the  tremendous  possibilities  of 
New  York  City  advertising. 

.  .  .  .*Many  a  manufacturer  sees  his  big  advertising  appro- 
priation going  out,  while  his  sales  just  barely  keep  the  business 
going.  Other  manufacturers  are  quite  satisfied  with  their  returns, 
because  they  don't  realize  the  possibilities  of  their  commodity. 

One  very  notable  instance  of  the  latter  condition  has  come 
within  my  own  experience  during  the  past  few  weeks. 

We  were  preparing  the  Gimbel  September  sale  of  housewares, 


*Pnnters  Itilc,  October  19,  1911,  p.  12. 


162        ADVERTISING  AS  A  BUSINESS  FORCE 

and  we  wanted  to  do  something  entirely  different  from  what 
had  been  done  before.  Most  of  these  sales  are  largely  exploita- 
tions of  cheap  enameled  kitchen  wares.  For  years  the  writer 
has  been  an  ardent  advocate  of  aluminmn  ware,  because  of 
its  bright,  cleanly  appearance,  its  light  weight  and  durability, 
as  well  as  for  its  sanitary  and  hygienic  superiority  over  all 
other  wares.  Then,  I  wanted  to  get  away  from  the  exploiting 
of  cheap  wares. 

We  got  in  touch  with  the  leading  aluminum  ware  manu- 
facturers of  America;  told  them  our  plans,  and  they  co-operated 
with  us  enthusiastically.  They  had  been  what  they  con- 
sidered liberal  general  advertisers  in  magazines,  and  had  their 
wares  on  sale  in  various  stores  in  New  York  City,  as  well  as 
throughout  the  United  States.  Business  was  usually  practically 
up  to  the  capacity  of  the  factory,  and  they  were  apparently 
satisfied.  When  we  began  to  talk  quantities  to  them  they 
thought  our  buyer  had  gone  crazy;  because  our  orders  were 
for  larger  quantities  than  they  had  ever  sold  in  all  New  York 
before.  And  we  were  planning  it  simply  for  one  month's 
selling. 

As  a  feature  of  the  aluminum  ware  sale  we  planned  a  nest  of 

three  saucepans  —  in  1-qt.,  3-pint,  and  2-qt.  sizes  —  and  sold 

the  three  pieces  at  a  combination  price.     I  advised 

A  Sale  of  ^n  order  of  10,000  sets.     The  buyer  finally  got  his 

anduT  fig^^^  ^P  t°  ■^'^O^  ^^*^'     '^^^  manufacturers  thought 

Results  even  that  quantity  would  last  an  entire  year.  They 
said  this  to  the  buyer,  but  he  ordered  the  quantity 
notwithstanding.  I  was  satisfied  to  have  this  quantity  ready, 
but  advised  him  to  have  the  manufacturers  prepared  for  tele- 
graphic re-orders.  After  two  days'  selling  the  re-orders  were 
telegraphed  and  new  quantities  hurried  forward.  B3'  the 
middle  of  September  the  trade  of  New  York  City  and  through- 
out the  country  had  been  so  stirred  up  over  the  success  of  the 
Gimbel  aluminum  ware  sale  that  the  factory  was  inundated 
with  orders  which  could  not  be  executed. 

I  have  never  seen  the  public  so  enthusiastic  over  any  mer- 
chandise as  they  were  over  the  opportunity  to  buy  aluminum 
ware  at  a  moderate  reduction  of  price.  Orders  for  these 
special  saucepan  sets  were  increased  to  an  aggregate  of  14,000 
sets  or  42,000  aluminum  pans.  And  this  in  addition  to  all  the 
other  aluminum  utensils  that  were  sold. 

Undoubtedly  this  event  was  the  inauguration  of  a  new  era 


NEW  TYPES  OF  RETAILER  163 

in  the  manufacture  of  aluminum  ware  in  America.  It  not 
only  stimulated  the  use  of  aluminum  ware  by  housekeepers 
themselves,  but  it  stirred  up  other  stores  of  New  York  City 
and  all  over  the  country  to  the  possibilities  of  these  beautiful 
kitchen  utensils. 

This  instance,  it  seems  to  me,  amply  demonstrates  the  value 
of  making  an  aggressive  demonstration  in  a  large  store  in  New 
York  City,  not  only  to  stimulate  the  immediate  sale  of  the  article 
in  question,  but  to  create  enthusiasm  for  it  all  over  the  country. 

The  one  thing  that  the  average  manufacturer  fails  to  realize 
is  the  enormous  number  of  people  that  visit  a  big  New  York 
store  every  day  —  a  greater  number  than  the  entire  adult  popula- 
tion of  any  but  the  great  cities  of  the  country. 

Woolworth,  the  5  and  10  cent  store  man,  pays  enormous 
prices  for  his  store  locations,  because,  as  he  says:  "I  want 
to  set  my  traps  where  mice  are  plenty." 

Smaller  dealers  pay  seemingly  extravagant  rentals  to  open 
a  shop  near  the  big  stores.  Think  how  infinitely  greater  is 
the  value  of  selling  space  right  in  the  heart  of  a  great  store!    .     .     . 

Two  matters  are  of  primary  importance  in  advertising  a 
commodity.  The  first  is  usually  well  taken  care  of  by  adver- 
tising experts  in  agencies  whose  work  is  usually  splendidly 
done.  This  is  presenting  the  information  to  the  public  about 
the  commodity,  and  bringing  the  commodity  to  the  public  atten- 
tion. 

The  second  feature  is  usually  neglected.     That  is,  telling  the 

public   where    the  article  can  be  secured.      Even  the  person 

Telling  the  ^^^  ^^^  become  interested  in  an  advertisement  will 

Public     not  make  the  effort  to  travel  all  over  the  city   to 

Where     find  an  article  advertised,  when  something  else  that 

To  Go  ^yj  probably  serve  the  purpose  as  well  can  be  secured 
anywhere. 

Further,  it  is  most  valuable  to  have  the  commodity  intro- 
duced by  one  store  exclusively.  This  is  because  a  store  always 
takes  interest  in  a  new  thing  which  it  alone  is  able  to  exploit. 
If  several  stores  have  the  commodity  on  sale  on  equal  terms 
none  of  them  is  willing  to  spend  much  money  or  make  any 
great  effort  to  promote  it;  for  the  reason  that  there  is  no  special 
value  to  the  store  in  doing  so.  The  owner  has  nothing  to 
offer  which  another  store  cannot  give,  and  if  he  offers  a  low 
price  any  other  store  having  the  commodity  on  sale  may  readily 
cut  the  price  and  take  all  the  value  away  from  it. 


164        ADVERTISING  AS  A  BUSINESS  FORCE 

There  are  many  stores  that  apparently  exist  only  to  destroy 
the  market  value  of  certain  commodities.  They  are  always 
willing  to  sacrifice  a  manufacturer  for  one  day's  advertising 
glory  for  themselves. 

Of  course  it  is  most  desirable  ultimately  that  a  commodity 
should  be  sold  by  all  stores;  but  the  manufacturer  who  is  wise 
will  have  patience  to  wait  until  his  article  is  properly  introduced 
by  one  good  store  before  trying  to  sell  it  to  others. 

My  advice  to  a  manufacturer    seeking  to  get  his  article 

introduced  in  New  York  would  be  to  select  one  store  which 

seems  to  him  to  be  best  able  to  introduce  his  particular 

How  to  commodity.  I  would  offer  to  put  in  my  goods  on 
Nm^ork  memorandum,  supply  one  or  more  demonstrators,  ac- 

Market  cording  to  the  space  the  store  could  devote  to  the 
work.  I  would  have  printed  matter  prepared,  in 
accordance  with  the  policy  and  style  of  the  store,  having  the 
advertising  manager  write  it  if  possible,  and,  in  any  case, 
approve  of  it  officially;  and  I  would  pay  for  any  advertising 
of  my  commodity  the  store  would  do.  I  would  very  care- 
fully instruct  my  demonstrators  as  to  how  the  article  should 
be  presented,  and  I  would  consider  it  of  such  importance  that  I 
would  myself  be  frequently  present  at  the  demonstration,  and  I 
would  have  my  manager  present  frequently,  because  I  would  con- 
sider that  nothing  that  was  done  in  the  promotion  of  the  sale  of 
my  commodity  was  of  any  importance  in  comparison  with  the 
way  in  which  it  was  introduced  and  sold  to  the  New  York  public. 

When  manufacturers  begin  to  realize  these  facts,  and  value 
space  in  a  large  store  at  its  real  importance,  and  also  fully 
realize  how  small  is  the  value  to  the  storekeeper  of  their  par- 
ticular commodity  in  comparison  with  the  many  other  impor- 
tant operations  of  his  own,  they  will  achieve  earlier  success  and 
broader  distribution,  with  a  much  smaller  expenditure  of  money. 

In  the  course  of  this  series  of  articles  Mr.  Hotchkin  takes 
up  the  much-disputed  question  of  the  attitude  of  the  depart- 
ment stores  toward  trade-marked  articles,  and  gives  very 
ably  the  department  stores'  side  of  the  equally  often-discussed 
problem  of  placing  the  store  name  on  articles  of  standard  grade 
or  type.  In  the  concluding  article  of  the  series  he  indicates 
the  limitations  of  some  of  the  statements  he  has  made: 


NEW  TYPES  OF  RETAILER  165 

*  These  articles,  written  from  the  viewpoint  of  one  who  has 
spent  twenty-five  years  in  the  retail  business,  naturally  do 
not  coincide  with  many  of  the  ideas  of  general  advertisers. 

But  it  must  be  remembered  that  I  am  not  attempting  to 
point  out  the  only  way,  but  rather  one  good  way  to  "Break 
into  the  New  York  Market,"  with  certain  kinds  of  commodities. 

It  should  also  be  remembered   that  I  have  been  asked  to 

J       ,     .     write  on  the  subject  of    "Breaking  into  New  York," 

Is  Different  which  means  the  introduction  of  new  commodities, 

from       and  by  no  means  implies  that  they  are  to  be  per- 

Permanent  manently  sold  under  the  same  methods  with  which 

""^^      they  have  been  introduced. 

Having  had  so  many  experiences  with  new  commodities, 
and  knowing  exactly  how  the  big  stores  feel  toward  them,  I 
have  advised  that,  in  most  cases,  one  store  should  be  selected 
for  the  introduction  of  many  things. 

Now,  I  am  asked,  "Is  it  always  advisable  for  a  manufacturer 
to  tie  up  to  one  store?"  and  my  reply  is, 

"Certainly  not." 

Each  commodity  has  its  own  conditions  to  face,  and  each 
problem  must  be  individually  solved.  If  the  maker  of  a  new 
breakfast  food  has  the  capital  for  a  big  advertising  campaign, 
perhaps  he  can  get  all  the  stores  to  stock  up  by  making  an 
exhibit  of  his  plans.  But,  if  I  were  a  manufacturer,  I  would 
rather  make  some  proposition  to  James  Butler  that  would  make 
all  his  stores  exploit  my  commodity  in  an  enthusiastic  way. 

Again,  if  I  had  a  high-class  food  commodity,  and  could  get 
Park  &  Tilford  to  let  me  exploit  it  over  their  name,  and  dis- 
tribute it  through  their  stores,  I  would  gladly  confine  the  article 
to  them,  for  a  liberal  introductory  period  at  least. 

My  attention  has  been  called  to  the  opinion  that  Holeproof 
Hosiery  suffered  from  being  confined  to  the  stores  of  Samuel 
Brill,  and  that,  being  confined,  it  made  it  easy  for  imitators 
to  come  on  the  market. 

I  will  answer  the  last  contention  first.        Broad  distribution 
never  interfered  with  the  coming  of  a  competitive  article;  for  all 
good  things,  not  protected  by  patent,  quickly  bring 
lem  oUh    ^^^^  imitators.       I  am  sure  that  it  was  a  fine  thing 
Imitator    ^^^  Holeproof  Hosiery  that  it  should  be  introduced 
to  New  York  City  by  Samuel  Brill,      The  endorse- 
ment of  Samuel   Brill,  and  the  splendid  advertising  he  did 
^Printers'  Ink,  November  23,  1911,  p.  60.         s 


IGG        ADVERTISING  AS  A  BUSINESS  FORCE 

for  it,  gave  Holeproof  Hosiery  a  strong  and  definite  standing 
in  New  York  City,  and  all  over  the  continent. 

If  twenty  stores  had  been  able  to  sell  Holeproof  Hosiery, 
none  of  them  would  have  been  willing  to  exploit  it  as  Samuel 
Brill  did,  because  it  would  have  been  advertising  a  competitor 
as  strongly  as  itself. 

As  to  making  a  men's  clothing  store  the  permanent  exclusive 
place,  for  an  article  of  consumption  by  men,  women  and  chil- 
dren— that  is  another  proposition.  A  thousand  customers  a 
day  make  a  magnificent  clothing  business;  and  fifty  thousand 
would  be  the  fair  proportion  for  the  big  store. 

This  would  seem  to  indicate  the  wisdom  of  seeking  a  broader 
distribution,  after  the  work  of  introduction  had  been  done, 
and  the  commodity  had  made  a  big  reputation  in  the  commu- 
nity. And  also  after  the  store  had  time  to  get  value  and  credit 
for  the  effort  it  had  put  on  the  commodity. 

What  is  good  for  hosiery  is  good  for  shoes,  gloves,  corsets, 
and  similar  articles  of  general  manufacture. 

One  vital  requisite  of  advertising  that  sells  goods,  is  to  let 
people  know  where  the  article  can  be  purchased.  Most  general 
advertising  does  not  do  this.  That  is  why  there  is  so  much 
substitution.  The  advertiser  thinks  it  is  enough  to  say: 
"Sold  in  all  good  stores,"  when  only  a  dozen  sell  it.  It  looks 
like  clever  flattery  for  the  stores  that  sell  his  goods;  but  the 
person  in  whom  the  advertisement  has  aroused  casual  interest 
would  often  need  a  detective  to  locate  the  article  in  a  week's 
time  —  and  so  advertising  results  go  glimmering. 

This  is  one  strong  reason  why  one  store  should  be  used 
for  the  introduction  of  an  article,  for  the  name  of  the  store 
that  sells  the  commodity  is  always  in  evidence. 

Another  point.  The  store  advertises  in  its  own  columns: 
"The  next  time  you  are  in  Gimbel's  let  us  demonstrate  Apollo 
for  you . ' '  The  advertisement  has  aroused  interest  in  the  Apollo, 
but  perhaps  it  was  forgotten;  but,  the  next  time  that  person 
finds  herself  in  Gimbel's,  the  thought  comes:  "What  was  it 
I  wanted  to  see  here  the  next  time  I  came  in.?  Oh,  yes,  the 
Apollo."  And  she  goes  up  to  hear  it,  and  the  matter  is  up 
to  the  salesman.  The  advertisement  has  served  its  whole 
purpose. 

But,  if  the  store's  name  had  not  been  used,  the  instrument 
might  never  have  been  thought  of  again  —  at  least  not  until 
another  advertisement  had  been  read. 


NEW  TYPES  OF  RETAILER  167 

The  buying  of  the  goods  must  be  made  easy  for  the  person 
who  reads  the  advertisement,  and  the  chief  point  of  all  is  where 
to  buy  them.  Of  course,  after  an  article  has  become  so  well 
known  as  to  be  on  general  sale,  this  point  assumes  less  im- 
portance. 

CREATING  DEPARTMENT  STORE  INDIVIDUALITY 

The  advertising  aspects  of  the  department  store  in  relation 

to  national  campaigns  have  been  brought  out  in  the  articles 

The  Local  ^^  ^^'  Hotchkin.    One  other  phase  of  the  department 

Advertising  stores'  work  in  advertising  requires  attention  —  that 

o/the^De-  '^^  ^^^  local  work.     This  is  a  huge   subject  in  itself 

pariment   and  it  cannot  be  more  than  mentioned  here. 

o/e  rpj^g  small  merchant  depends  upon  his  own  indi- 

viduality, and  its  expression  through  personal  contact  to  tie  his 
customers  to  his  store.  The  department  store  must  do  the  same 
thing  on  an  immense  scale  and  without  the  element  of  personal 
service.  In  other  words,  the  department  store  is  obliged  to  create 
individuality  at  wholesale.  This  is  one  of  the  most  difficult 
problems  of  the  department  store.  It  is  an  apparently  simple 
matter  for  a  department  store  to  "move  goods,"  but  real 
success  in  department  store  operation  depends  not  merely  on 
keeping  goods  moving,  but  involves  the  necessity  of  building 
up  a  large  and  increasing  clientele  which,  together  with  the 
casual  sales,  may  enable  the  store  to  secure  the  steady  increase 
in  business  which  is  necessary  for  its  success. 

Some  phases  of  this  problem  of  creating  department-store 
individuality,  showing  the  intimate  interrelation  between  the 
merchandising  policy  and  the  publicity  methods  of  such  a 
store,  are  described  in  an  article  by  Robert  Easton  of  the 
William  D.  McJunkin  Advertising  Agency  of  Chicago: 

*  In  the  largest  cities  there  are  three  classes  of  department 
stores:  (1)  those  which  consciously  cater  to  people  that  do 
not  "have  to  count  the  pennies"  —  that  want  the  best  and  are 

*Pnnters'  Ink,  August  18,  1910,  p.  26. 


168        ADVERTISING  AS  A  BUSINESS  FORCE 

able  to  pay  for  it;  (2)  those  stores  which  aim  at  widespread 
popularity  and  strive  to  appeal  to  all  sorts  and  conditions  of 
men; (3)  those  which  definitely  aim  to  supply  cheap  goods  for 
people  that  can  afford  no  other. 

Of  course  these  classes  shade  into  one  another.  There  is 
no  sharp  dividing  line.  The  "high-toned"  store  has  a  base- 
ment supplying  the  wants  of  the  most  thrifty-minded  of 
patrons;  and  all-embracing,  "popular"  stores  have  an  eye  on 
the  "fine"  trade.  In  fact,  the  universal  trend  among  depart- 
ment stores  is  always  upward  —  toward  better  goods,  higher- 
priced  goods.  But,  to  a  certain  extent,  trade  of  the  well-to-do 
gravitates  naturally  to  the  stylish,  wide-aisled,  well-serviced 
store,  that  of  the  poor  to  the  "city's  bargain  centre,"  while 
plain,  ordinary,  neither-poor-nor-rich  customers  just  as  natur- 
ally turn  to  the  store  that  is  midway  between  these  extremes. 

But  the  individuality  which  department  stores  strive  after 
has  no  reference  to  this  natural  classification  which  a  shopper 
makes  almost  instinctively  —  certainly  after  one  or  two 
shopping  trips  around  town.  The  individuality  aimed  at  is 
that  which  characterizes  a  department  store  simply  as  a  place 
to  trade  at,  which  will  draw  an  increasing  volume  of  trade 
and  which  will  render  trade  'permanent.  This  last  consideration 
is  of  immense  importance,  for  it  is  less  expensive  to  cater  to 
a  permanent  clientele  than  to  the  floating  custom  of  the  big 
city,  which  must  be  secured  by  prodigal  advertising  and  inces- 
sant bargain-giving. 

Individuality  —  if  we  remember  that  individuality  denotes 

also  worthy  characteristics  as  well  as  different  characteristics  — 

is  a  selling  force  comparable  only  to  that  "  good  name 

Individual- y^  man  or  woman"  which  is    "the  immediate  jewel 

^SeUirw     ^f  their  soul."     It  is  not  exactly  prestige;  it  is  not  a 

Force  mere  reputation  for  modishness;  not  simply  a  syn- 
onym for  square-dealing,  or  efficient  merchandising, 
or  low-pricing.  It  is  all  of  these,  or  any  one  of  these,  so  im- 
pressed on  a  woman's  mind  that  she  hardly  ever  is  tempted 
to  shop  anywhere  else  than  at 's.  This  public  knowl- 
edge of  a  store's  individuality  is  oftenest,  nowadays,  built  up 
by  advertising.  But  it  may  be  due  in  part,  or  even  wholly, 
to  efforts  outside  of  advertising.  Yet,  however  acquired,  it  is 
a  vital  and  economical  selling  force. 

The  fact  that  strong,  compelling  individuality  may  be  known 
otherwise  than  by  advertising  is  illustrated  by  the  case  of 


NEW  TYPES  OF  RETAILER  169 

B.  Altman  &  Co.  The  reputation  of  this  store  was  made 
before  advertising,  not  after.  And  note  what  an  economic  force 
it  is.  A  plain  announcement  by  this  store  —  without  verbiage, 
imadorned  —  will  sell  the  goods  as  surely  as  an  advertisement, 
twice  or  thrice  its  size  and  rendered  attractive  by  all  the  arts 
of  display,  proceeding  from  some  other  store.  This  instance 
is  quoted  not  because  it  is  typical  of  the  methods  by  which 
individuality  is  usually  attained,  but  because  it  illustrates 
what  an  enviable  possession  it  is  and  what  a  source  of  economy. 
In  the  majority  of  cases,  however,  where  individuality  is 
predicable  of  a  department  store  it  has  been  the  product 
of  advertising  backed  by  the  goods  and  the  service. 

To  the  manufacturer  the  acquisition  of  a  trade-mark  is  a 

simple  matter,  though,  of  course,  the  value  of  the  trade-mark 

represents  the  sum  of  the  manufacturer's  activities. 

The  Store's  the  excellence  of  his  goods  and  the  extent  of  their 

"Atmos-   puijiic  acceptance.     But  individuality,  which  is  the 

Its  Trade-  store's  trade-mark,  is  a  difficult,  a  complicated  affair. 

Mark  No  concrete,  visible  phrase  or  sign,  though  exclusively 
used  by  a  store,  begins  to  represent  a  store's  indi- 
viduality. Such  phrase  or  sign  may  prove  helpful,  and  much 
effort  is  directed  to  securing  something  catchy  and  impressive 
to  serve  as  a  store's  slogan.  But  a  moment's  reflection 
will  show  that  labeling  a  store  as  "The  Store  of  Quality," 
"The  Bargain  Centre  of  Busyville,"  "The  Store  That 
Saves  You  Money,"  and  so  forth,  goes  but  a  little  way  toward 
creating  the  individuality  which  builds  up  permanent  trade. 
But  it  is  in  the  right  direction  and  will  help  if  only  the  slogan 
is  chosen  with  reference  to  the  real  policy  of  the  store,  as 
that  policy  is  revealed  in  the  store's  service. 

It  is  worth  repeating  that  a  slogan  is  valuable  only  in  so 
far  as  it  accords  with  the  nature  of  the  store's  service.  For 
it  is  in  service  that  the  individuality  of  a  store  centres.  Indi- 
viduality is  that  group  of  impressions  inseparably  associated 
with  a  particular  store  in  the  minds  of  those  who  shop  there. 
One  shopper's  mind  may  be  more  deeply  impressed  with 
one   aspect   of   the   service  —  another's   with   another.      One 

may  shop  at  's  because  goods  are  promptly  exchanged; 

another  because  the  clerks  are  polite;  another  because  one 
always  finds  what  one  wants;  another  because  there  is  no 
misrepresentation  of  values;  another  because  it  is  such  an 
inviting  place  to  trade  at;  another  because  the  "best  people" 


170        ADVERTISING  AS  A  BUSINESS  FORCE 

trade  there.  And  so  on.  One  of  these  elements,  or  others 
Hke  them,  or  a  mixture  of  such  elements,  constitutes  individu- 
ality —  the  something  distinctive  and  good  which  separates 
one  store  from  its  competitors. 

Does  advertising  create  individuality?  Yes  and  no.  Yes, 
in  so  far  as  advertising  is  the  store's  propaganda  —  the  chief 
means  by  which  the  store  makes  its  service  known  to  new  cus- 
tomers and  makes  old  customers  conscious  of  things  that  they 
may  have  only  dimly  felt  and  seen.  No,  in  so  far  as  adver- 
tising is  utterly  inefficient  when  it  is  not  a  perfect  mirror 
of  store  service. 

All  department-store  advertising  is  analyzable  into  two 
elements  —  news  and  missionary  effort;  news  of  what  is 
happening  in  the  store,  sales,  items,  prices;  missionary  effort 
to  make  converts  and  establish  the  faith  of  the  faithful.  These 
two  elements  correspond  roughly  to  the  news  and  editorial 
columns  of  a  newspaper.  And  just  as  in  the  newspaper  the 
news  is  tinged  (if  not  distorted)  by  the  policy  of  the  newspaper, 
so  the  sales-and-bargain  news  of  the  store  is  affected  by  the 
aims  and  methods  of  the  store's  management. 

It  is  simply  ridiculous  for  the  proprietor  of  a  store  to  tell 

his  advertising  manager  to  "give"  him  advertising  of  such  and 

such  a  character.     The  advertising  can  but  "hold  the 

The  ^     mirror  up  to  nature" — reveal  the  high  or  low  aims. 

Advertising  ^j^^  g^.^^  ^^  vacillating  policy  of  the  store  management. 

Stock  A  store  with  individuality  may  for  a  time  be  mis- 
represented by  its  advertising.  A  store  without  indi- 
viduality may  for  a  time  delude  the  public  through  its 
advertising  into  the  belief  that  it  possesses  individuality.  By 
this  it  is  not  meant  that  conscious  effort  has  no  value  in  ad- 
vertising, but,  on  the  whole,  advertising  unconsciously  tends 
to  fit  the  store  as  a  glove  fits  the  hand.  Misfit  advertising  is 
soon  thrown  into  the  discard  —  and  sometimes  succeeds  first 
in  throwing  the  store  there. 

In  the  broad  view  the  efforts  of  the  advertising  manager 
are  confined  to  the  creation  of  harmony  —  harmony  between 
the  public  announcement  and  the  store's  individuality.  The 
scope  of  such  efforts  is  wide  enough  for  the  most  ambitious. 
It  embraces,  first,  an  appropriate  display  form  for  the  adver- 
tising —  an  appearance  which  suggests  the  refinement,  the 
dignity,  the  high  standards  or  the  hustling  activity  of  the 
particular  store.     In  this  alone  there  is  room  enough  for  the 


NEW  TYPES  OF  RETAILER  171 

exercise  of  the  keenest  ingenuity.  It  includes,  second,  a  style 
and  manner  of  address  comporting  with  the  policy  and  ideals 
of  the  store.  It  is  concerned,  third,  with  every  particular 
statement  regarding  goods  and  prices  that  goes  into  an  adver- 
tisement. When  it  is  remembered  that  such  statements  have 
their  source  in  a  score  or  more  of  men  and  women  managing 
the  various  departments,  it  is  clear  that  the  advertising  manager 
is  confronted  with  a  variety  of  daily  problems  rendered  ex- 
tremely difficult  through  the  necessity  for  reckoning  the 
"personal  equation."  An  advertising  manager  who  achieves 
harmony  in  the  broadest  sense  of  the  term  deserves  well  of 
the  store. 

It  is  no  depreciation  of  the  value  of  the  advertising  manager 
to  recognize  the  truth  that  the  important  factor  in  advertising 
is  the  "old  man"  —  proprietor,  general  manager,  merchandise 
man  —  whoever  may  be  the  active  and  real  originator  of  the 
store's  policy  and  the  dictator  of  the  lines  on  which  business 
is  conducted.  The  "old  man"  may  be  wholly  incapable  of 
handling  the  advertising  problem  —  of  attaining  that  harmony 
between  service  and  announcement  of  service  which  is  the  very 
essence  of  good  advertising.  He  may  and  does  make  daily 
blunders  in  insisting  on  personal  preferences  in  a  sphere  in  which 
he  is  not  sure-headed  through  experience.  But  it  is  for  him  to 
decide  when  harmony  is  attained  by  the  advertising  manager. 

The  reason  why  there  is  much  poor  advertising  of  department 
stores  is  not  that  advertising  talent  is  difficult  to  procure. 
It  is  due  to  the  fact  that  so  many  department-store  managers 
have  nothing  but  a  "hand-to-mouth"  policy,  no  conception  of 
true  principles  of  merchandising,  no  ideal  of  public  service, 
and  obstinately  cling  to  the  superstition  that  advertising  can 
W'Ork  miracles,  can  achieve  results  entirely  unrelated  to  what 
is  going  on  "behind  the  scenes." 

ADVERTISING   ASPECTS   OF   THE   CHAIN   STORE 

The  chain-store  movement  is  of  even  more  recent  origin 
than  the  department-store  development  in  the  United  States, 
and  is  even  more  meagrely  supplied  with  reliable  data  which 
are  generally  available.  Many  of  the  chain  stores  have  worked 
out  data  for  their  own  use,  but  these  have  not  yet  become 
public  property. 


172        ADVERTISING  AS  A  BUSINESS  FORCE 

The  chain  store,  in  brief,  aims  to  secure  all  of  the  buying 

advantages  of  a  large  scale  retailer  (such  as  a  department  store) , 

and  to  retain  at  the  same  time  all  of  the  selling 

of  tiiT^  advantages  involved  in  the  personal  contact  between 

Chain     the  retailer  and  the  consumer,  as  well  as  the  advan- 

tages  which  may  be  secured  by  concentrating  and 

departmentizing  the  common  functions  of  the  retail  concerns. 

The  way  in  which  these  two  objects  are  attained  by  a  chain  store 

is  well  illustrated  in  the  outline  of  the  methods  of  operation 

of  the  United  Cigar  Stores  as  they  are  described  by  George  J. 

Whelan,  who  has  been  the  leading  spirit  in  this  organization 

since  its  inception. 

.  .  .  .  *  We  started  in  1901  with  one  store  in  Syracuse, 
N.  Y.  We  have  to-day  some  thousand  stores  scattered  over 
every  section  of  the  country  except  the  South  or  Southeast. 

The  growth  of  this  chain  of  retail  stores  is  the  record  of  a 
tendency  in  retail  trade  which  was  anticipated  in  some  other 
lines  and  must  be  repeated  in  all  lines  until  the  whole  machinery 
of  distribution  is  readjusted  to  the  demands  of  the  times. 

The  change  was  as  natural  and  inevitable  as  the  change  in 
production  from  hand- tool  to  power-machinery.  The  reorgani- 
zation of  production  has  been  going  on  for  years,  but  the 
reorganization  of  distribution  is  just  beginning.  Both  proc- 
esses are  naturally  attended  by  some  unpleasant  results, 
but  this  is  not  the  fault  of  the  machinery.  It  had  to  come 
because  it  is  a  higher  economy. 

The  idea  that  we  had  back  in  Syracuse  was  a  very  simple 
one.  The  retail  business  at  that  time  was  falling  to  pieces. 
There  were  no  retail  cigar  stores,  or  next  to  none.  They 
were  all  going  into  the  hotels,  cafes  and  clubs  on  one  hand  and 
turning  into  news  stands  on  the  other. 

There  was  no  service  to  speak  of,  nothing  done  to  attract 
business  and  keep  it.  The  manufacturer  and  the  consumer 
did  all  the  work.  The  manufacturer  put  the  cigars,  cigarettes, 
and  tobacco  there  and  the  consumer  came  and  took  them 
away.     ... 

The  application  of  the  ideas  we  held  to  our  business  in  Syra- 

*Printers  Ink,  December  14,  1911,  p.  3. 


NEW  TYPES  OF  RETAILER  173 

cuse  revolutionized  it.     We  opened  up  a  second  store  in  Elmira 

and  tried  the  ideas  out  there.      They  worked   out  the    same 

every  time.      W^e  added  other  stores.     Always    the 

The  United  game  story.     By  this  time  I  was  running  the  factory 

llethodr  ^"^^  ^^^  taking  general  charge  of  the  business. 

Before  long  we  had  forty  stores  in  the  chain  and 
had  spread  into  other  states.  The  original  conception  had 
grown.  It  was  now  a  large  undertaking,  too  big  for  a  small 
company.  We  moved  our  headquarters  down  to  New  York 
City  and  started  negotiations  with  the  American  Tobacco 
Company  for  capital  and  trade  connections.  The  deal  hung 
fire  for  a  year  or  two  and  then  it  went  through.  We  reor- 
ganized the  company  on  a  larger  scale,  took  over  the  twenty 
retail  connections  of  the  American  company  throughout  the 
country  and  started  on  a  new  climb  upward. 

*  .  .  .  .  We  started  out  to  give  the  consumer  the 
best  we  dared  to  give  him.  Everything  was  aimed  to  please  him 
—  not  as  a  philanthropy,  but  for  business.  We  picked  sites 
for  our  stores  where  the  greatest  number  of  consumers  could 
find  us;  we  made  the  stores  attractive  inside  and  out;  we  stocked 
them  with  the  best  goods  we  could  buy  at  the  lowest  prices; 
we  trained  our  clerks  in  courtesy  and  service;  we  devised 
window  trims  to  catch  the  eye;  we  prepared  advertising,  dis- 
tributed premiums,  and  worked  special  schemes.  And  then 
on  top  of  that  we  provided  a  scheme  by  which  these  details 
should  be  taken  care  of  automatically  and  automatically 
improved.     We  devised  a  system  and  set  a  system  to  icatch  it. 

We  do  not  have  the  kind  of  system  that  gets  in  the  way  and 
absorbs  the  attention  of  the  heads  of  the  business.  Ours  is  a 
system  that  does  away  with  unnecessary  thinking  and  planning. 
Every  detail  that  can  be  is  systematized. 

I  can  sit  here  in  the  office  and  ask  how  many  boxes  of  "  Sweet 
Caporal"  cigarettes  does  such  and  such  a  store  out  in  Seattle 
have  in  stock,  or  how  many  did  he  sell  last  month,  or  the 
corresponding  month  in  1910  or  1909,  and  in  two  minutes  I 
can  find  out.  I  can  get  the  information  while  the  train  of 
thought  that  prompted  the  question  is  fresh  in  my  mind. 
I  don't  have  to  write  out  to  Seattle  or  wire  out.     It  is  here. 

And  the  information  costs  next  to  nothing  to  get.  It 
comes  out  of  the  monthly  audit  and  daily  reports. 


*Pnnters  Ink,  December  21,  1911,  p.  26. 


174        ADVERTISING  AS  A  BUSINESS  FORCE 

Our  business  is  largely  built  on  reports.     We  want  reports 

for  two  reasons.     First,  for  our  own  protection,  to  keep  track 

of  the  stock  and    the   sales   in   the  many   hundred 

"^HYd^^  stores,  to  trace  leaks,  prevent  them,  and,  in  general, 

voHs"  train  the  clerks  in  our  widely  separated  locations  to 
habits  of  accuracy  and  honesty.  Second,  we  want 
reports  so  as  to  help  the  sales  by  showing  us  the  reason  for 
every  condition,  good  or  bad,  in  the  whole  country.  With 
that  information  we  can  immediately  take  steps  to  correct 
the  bad  condition  or  extend  the  good. 

We  have  a  system  that  shows  us  all  that,  and  we  have  another 
system  that  immediately  makes  use  of  the  material.  It  is 
elaborate  and  calls  for  a  great  many  clerks  and  accountants, 
but  the  net  result  is   simplicity,  and   it  goes  like  clockwork. 

It  has  made  the  work  of  every  department  head  much 
easier.  We  have  been  able  to  turn  from  guesswork  and  office 
drudgery  to  clean-cut  facts  and  figures.  The  time  we  used 
to  spend  on  guessing  and  verifying  and  experimenting  we 
can  now  put  on  sales  development.  And  sales  development 
means  almost  wholly  a  question  of  taking  notice  of  the  weak 
spots  revealed  by  the  reports  and  applying  locally  the  methods 
which  have  proved  of  value  in  other  places. 

Our  knowledge  of  all  these  things  is  a  matter  of  certainty.  We 
know  that  if  certain  things  are  done  the  result  will  be  satis- 
factory and  certain.  The  important  thing  for  the  officers  to 
do  is  to  see  that  these  other  things  are  done,  I  do  not  per- 
sonally need  to  know  a  lot  of  details  about  the  business. 
Practically  the  only  thing  I  am  doing  in  the  company  to-day 
is  to  take  care  of  anything  that  comes  up  in  the  legal  depart- 
ment, or  to  harmonize  differences  and  keep  things  running 
smoothly.  If  two  men  have  any  differences  they  come  to 
me  to  settle  them.  That  is  part  of  our  policy  and  system. 
And  before  they  hear  my  decision  they  must  agree  to  be 
friends  after  that. 

I  don't  want  to  know  the  details.  I  can  trust  others  to 
attend  to  that.  I  want  to  see  things  broadly,  and  so  I  have 
arranged  that  every  regular  report,  by  the  time  it  gets  to  me, 
is  simplified  to  a  single  figure. 

All  of  our  reports  are  by  percentages.  I  do  not  care  whether 
a  store  costs  $6,000  or  $16,000  a  year.  All  I  want  to  know  is 
what  the  percentage  is  on  every  dollar  we  take  in.  I  look 
at  Kansas  City,  for  instance,  and  see  that  it  costs  us  8  per 


NEW  TYPES  OF  RETAILER  175 

cent.  rent.    That  is  too  high,  so  we  find  out  how  we  can  remedy 

it.   We  take  an  inventory  of  our  business  every  day.  We  carry 

about  $1,000,000  worth  of  stuff.     It  was  $1,300,000  at  the  last 

figures.      I  have  a  book  in  which  I  can  see  at  any 

Knowing  moment  just  how  the  business  stands.     This   book 

Business  contains  a  hst  of  heads,  such  as  "gross  sales,"  "rent," 

Stands     "miscellaneous   wages,"    "cost   of    lighting  stores," 
"miscellaneous  expenses,"  "money  spent  in  schemes 
over  which  the  store  has  no  control,"  such  as  special  advertis- 
ing campaign,  etc. 

Every  dollar  that  comes  in  must  carry  against  it  a  charge. 
Two  per  cent.,  for  example,  is  charged  against  every  store 
for  the  advertising  fund,  and  the  men  who  think  they  can 
turn  that  2  per  cent,  into  a  profit  for  themselves  by  not 
advertising  are  fooled;  it  is  charged  against  them  anyway. 

So  that  is  the  first  thing  —  exact  knowledge  as  to  where 
we  stand  every  day  of  the  year.  I  do  not  know  whether  we 
have  carried  our  system  any  farther  than  some  other  big 
concerns,  but  I  do  know  or  believe  that  95  per  cent,  of  the 
retail  shopkeepers  do  not  know  mucTi  about  their  business. 
I  believe  that  fully  50  per  cent,  do  not  take  an  inventory  once 
a  year.  We  have  formal  inventories  taken  by  men  sent  out 
from  the  home  office  twelve  times  a  year,  arranged  at  irregular 
and  unexpected  times,  and  we  have  daily  reports  of  sales. 

Yearly  inventories  wouldn't  be  of  any  use  to  us  —  or  half- 
yearly  or  quarterly.  Too  much  can  happen  in  three  months. 
We  want  to  know  what  is  wrong  before  anybody  else  knows  it. 

Here  is  where  most  business  is  wrong.  Most  retailers  do 
not  know  what  they  are  doing.  Business  men  tell  me  about 
the  amount  of  things  in  stores.  They  say  people  are  hard 
up  and  do  not  buy.     I  do  not  believe  that  at  all. 

The  trouble  is  that  the  average  merchant  is  buying  and 
selling  on  a  wrong  basis.  He  buys  as  long  as  his  money  lasts 
and  then  tries  to  sell  his  goods  at  a  relatively  large  profit. 
If  he  has  $3,000  in  the  bank  he  buys  goods  with  it,  and  keeps 
his  goods  until  he  gets  his  profit  or  needs  the  money. 

I  believe  in  doing  a  lot  of  business  on  a  small  margin 
The  Cigar  qJ  profit.     If   I   were   in   the  egg   business,   instead 

SeUinq    ^^  doing  as  a  lot  of  dealers  do  —  buy  eggs  in  June 

Policy     or  July  and  wait  to  sell  them  at  a  high  per  cent. 

profit  when  the   prices  go  way  up  —  I  would    sell 

them   as  soon  as  I  could  at  a  6  per  cent,  margin  of  profit. 


176        ADVERTISING  AS  A  BUSINESS  FORCE 

I  would   make  more  money  than  the  man  who  buys  at  18 

cents  and  waits  until  the  price  of  eggs  is  38  cents.  I  would 
be  selling  so  many  more  eggs  and  I  would  be  building  a 
business.  I  would  probably  sell  a  hundred  times  as  many  eggs 
on  the  smaller  margin  of  profit  as  the  other  fellow  sells  at  a 
larger  profit. 

Now,  in  our  own  line:  Suppose  you  can  make  a  certain 
cigar  from  $35  a  thousand  up.  When  you  get  to  above  $35 
the  average  manufacturer  jumps  to  $50.  Now  we  go  $2 
at  a  time  or  $10  at  a  time,  according  to  the  cigars,  not  merely 
to  sell  cheaply,  but  so  as  to  make  a  quick  turnover.  That 
is  the  main  thing. 

Our  trade  is  different  from  the  department  store,  for  instance, 
in  that  if  the  department  store  sells  one  thing  very  cheaply 
and  loses  on  it,  it  makes  it  up  on  another  line,  whereas  if 
we  sell  our  goods  at  a  loss  we  cannot  make  up  on  any  other 
line. 

Suppose  we  buy  a  job  lot  of  cigars  worth  $100  for  $50, 
they  would  have  to  be  sold  to  bring  $60.  Quick  repeating 
is  better  than  slow  profits. 

The  average  drug  store  sells  its  own  goods  at  a  higher  profit 
than  it  does  patent  medicines.  It  sells  patent  medicines  at 
cost  and  makes  10  per  cent.  Then  it  puts  up  a  remedy  of  its 
own  and  makes  a  big  profit  on  it. 

The  United  practice  is  just  the  opposite.  We  make  less 
money  on  private  brands  than  on  public  brands.  Our  private 
brands  are  of  greater  value  than  the  public  brand. 

A  package  of  cigarettes  that  we  sell  for  10  cents  should 
represent  a  higher  grade  brand  than  a  public  brand  sold  at 
10  cents.  If  the  man  happens  to  like  the  cigarette,  he  must 
com^  back  to  us  because  he  can't  get  it  at  any  other  place. 

Ninety  per  cent,  of  the  dealers  let  other  people's  ideas  run 

their  business.     Ninety  per  cent,  of  the  dealers  are  governed 

by  the  people  who  trade  with   them.      We  run  our 

An  Aver-  business  instead  of  letting  other  people  do  it. 

Business       "^^^  business  of  the  average  retail   cigar   store   is 

about  $30  a  day.     Our  retail  business  is  about  $150 

a  day.     That  is  the  difference  between  the  two  methods  of 

doing  business. 

The  result  of  the  systematic  way  in  which  we  tried  to  handle 
our  business  is  that  we  began  early  to  devise  ways  and  means 
of  utilizing  the  mass  of  information  poured  in  by  the  reports. 


NEW  TYPES  OF  RETAILER  177 

We  brought  the  heads  of  departments  together  in  weekly 
conferences.  These  are  no  formal  and  perfunctory  affairs 
with  us.  They  are  essential  to  the  business.  In  the  conference 
I  have  only  one  vote.  I  may  propose  suggestions,  but  they  will 
not  go  through  on  that  account. 

I  claim,  for  instance,  that  our  customers  do  not  cut  the 
end  of  the  cigar  off  right,  but  I  have  not  been  able  to  make  the 
people  in  this  office  understand  that.  For  six  months  I  have 
been  trying  to  get  them  to  see  that  if  the  cigar  were  cut  off 
in  a  V-shape  instead  of  straight  across  it  would  taste  better 
and  be  a  better  smoking  cigar.  I  know  that  it  is  true,  but  I 
do  not  try  to  railroad  it  through  because  free  discussion  and 
independence  of  judgment  is  worth  more  to  the  business  than 
the  adoption  of  any  one  scheme. 

I  put  one  of  these  schemes  up  to  our  people  and  back  it 
and  get  them  to  take  it  in  hand.  Then  in  a  few  days  or  a  week, 
I  take  the  opposite  side.  I  am  the  first  one  to  get  after  it. 
If  I  put  a  plan  up  for  operating  the  business  and  then  do 
not  take  an  opposite  end,  they  are  apt  to  continue  it  for  the 
sake  of  not  hurting  my  feelings,  although  perhaps  they  do 
not  think  it  a  good  scheme.  If  the  men  go  against  it  I  back 
it  again  until  the  possibilities  are  all  threshed  out. 

The  execution  of  all  these  ideas  and  suggestions  is  carried 
out  by  several  departments,  which  in  some  cases  are  subsidiary 
companies,  the  United  Stores  Realty  Company,  for  instance. 

When  we  have  determined  to  enter  a  city  or  territory, 
the  realty  company  goes  ahead  and  picks  out  the  site  or  sites 
for  stores.  We  look  for  the  places  where  men  most 
Entering  congregate.  They  generally  are  corners.  Investi- 
Territory  gators  carefully  check  off  the  traffic  for  days  at  a 
time  in  various  parts  of  the  city  until  we  know  abso- 
lutely the  most  desirable  locations. 

Sometimes  we  cannot  get  the  locations  at  any  reasonable 
rent,  or  at  all.  Then  we  take  the  nearest  location  and  wait 
our  time.  It  often  turns  out  that  the  best  thing  we  can  do 
is  to  buy  or  lease  the  whole  building.  In  this  way  we  often 
get  the  site  we  want  without  rent,  because  the  store  space 
required  is  so  small  that  the  rent  of  the  other  tenants  makes 
up  the  difference. 

Our  stores  are  compact.  They  are  arranged  on  the  principle 
of  supplying  the  customer  in  the  shortest  possible  time.  Prac- 
tically everything  asked  for  is  within  the  clerk's  reach.     Every 


178        ADVERTISING  AS  A  BUSINESS  FORCE 

inch  of  space  beyond  that  is  waste,  and  worse  than  waste  — 
it  is  in  the  way. 

After  the  site  has  been  secured  the  furnishing  department 
follows  on  and  puts  in  the  equipment,  which  is  uniform  in 
every  store  in  the  country. 

After  it  goes  the  supply  department,  which  automatically 
stocks  the  goods. 

Then  the  sales  department  takes  hold,  assigns  the  men  and, 
fits  them  into  the  system. 

The  window  display  department  now  gets  under  way,  and 
last  of  all,  the  auditing  department  begins  to  check  up. 

All  of  the  reports  from  all  of  these  departments  come  into 
our  headquarters,  here  in  New  York,  are  worked  over  by  the 
auditing  department  of  250  persons  and  are  boiled  down  to 
percentages  that  tell  us  at  a  glance  how  everything  is  going 
in  every  part  of  the  field. 

All  these  things  are  vital  to  the  sales  department.  They 
lift  the  burden  off  it.  A  good  deal  of  what  in  another  business 
would  be  the  wear  and  tear  of  selling  is  removed  at  one  stroke 
from  that  department  and  distributed  among  other  depart- 
ments, where  it  becomes  mere  routine,  always  under  control 
and  always  tending  toward  improvement. 

For  instance,  if  the  goods  are  good  and  fair-priced,  the  store 
interior  pleasing,  the  window  trim  attractive,  the  advertising 
sensible,  and  the  clerks  courteous,  trade  will  gravitate  our 
way  naturally.  The  only  way  to  make  it  move  faster  is  to 
improve  the  goods,  service,  advertising,  window  trim,  etc. 
It  is  not  a  matter  of  what  some  would  call  "salesmanship," 
except  in  so  far  as  this  is  a  matter  of  attention  to  details. 

*  With  us  the  extension  of  territory  offers  no  problem 
for  the  sales  department  to  worry  over.  It  is  taken  care  of 
almost  automatically.  Our  realty  company's  business  is  to 
know  what  territories,  what  cities,  and  what  sites  in  the  cities 
are  desirable.  It  is  its  sole  business  to  determine  this,  secure 
the  sites,  and  of  course  manage  the  property  bought  or  leased, 
in  the  best  way. 

One  thing  that  lifts  a  big  burden  off  the  sales  department 
and  offers  a  tremendous  inducement  to  the  customers  to  buy 
is  the  premium  department.  This  is  one  of  the  features  of  the 
business.     We  give  away  annually  some  $2,500,000  worth  of 


♦December  28,  1911,  p.  3. 


NEW  TYPES  OF  RETAILER  179 

merchandise,  at  retail  prices,  which  are  about  double  what 
they  cost  us. 

When  we  started  the  premium  plan  we  gave  these  certificates 

to  people  who  paid  us  cash  and  did  not  give  them  to  people 

who  took  our  goods  on  credit.      After   a   while    we 

Taking  abolished  the  whole  credit  system  and  gave  them  to 
i^'^I'Oads  everybody.      We  found  the  premium  idea  was  too 

Selling     valuable  to  put  any  limit  on.     We  found  this  out 

Force  before  the  customers  did.  If  we  did  not  force  the 
clerk  to  force  the  consumer  to  take  the  certificate, 
not  50  per  cent,  of  the  certificates  would  be  taken. 

Our  clerks  are  instructed  not  to  lay  the  certificates  down  on 
the  case,  but  to  put  them  in  the  customer's  hands. 

Our  reason  for  insisting  on  this  is  a  double  one.  In  the 
first  place,  the  premium  is  not  really  a  gift,  as  it  seems  to  be. 
It  is  something  our  patron  really  pays  for,  according  to  our 
analysis,  although  he  would  not  get  it  if  we  did  not  put  it  in 
the  plan.  Instead  of  giving  him  the  extra  cent  or  two,  we 
give  him  the  certificate. 

These  pennies  make  up  a  million  dollars  or  more  annually, 
and  through  the  greater  purchasing  power  of  this  money  in 
the  mass  we  are  enabled  to  buy  the  merchandise  the  consumer 
wants  (or  what  is  more  true,  that  his  women-folk  want)  at 
half  the  price  he  would  have  to  pay  for  it  elsewhere.     .     . 

Still  another  load  is  taken  off  the  sales  department  by  the 
organization  of  the  window  trimming.  It  is  another  of  the 
methods  of  automatically  adding  selling  power  to  the  store. 
In  the  same  way  that  the  other  elements  of  the  business  are 
handled,  the  planning  of  window  display  is  centralized  in  the 
home  office  and  goes  on  regularly  and  methodically. 

And  so  on  with  the  other  features.  Just  so  far  and  so  fast 
as  they  can  be  systemized  we  do  it,  concentrating  upon  one 
thing  after  another  and  working  each  of  them  out  to  a  finish. 

Such  a  policy  apparently  does  not  leave  much  room  for 
individual  initiative,  but  it  does  just  the  same.  We  have 
standardized  our  methods,  but  it  always  remains  to  lift  the 
standard.  We  have  labored  with  our  clerks,  but  there  are 
still  many  who  do  not  yet  appreciate  the  importance  of  unfailing 
courtesy  and  cheerfulness. 

We  can  increase  the  intelligence  of  the  men  by  increasing 
their  knowledge  of  the  business.  We  try  to  improve  their 
physical  well-being  by  providing  medical  attention  for  them. 


180        ADVERTISING  AS  A  BUSINESS  FORCE 

Even  their  feet  are  looked  after,  because  a  clerk  with  aching 
feet  is  not  at  his  best  and  cannot  do  justice  to  his  work.  That 
is  our  business  and  we  look  after  it. 

But  the  great  inducement  a  clerk  has  to  do  his  best  is  that 
he  is  to  a  certain  extent  a  partner  in  the  business.  Each  head 
clerk  receives  a  certain  percentage  of  the  receipts  for  his  share 
of  the  business,  and  each  clerk  under  him  receives  a  salary 
based  upon  what  he  sells.  His  salary  depends  upon  himself 
and  he  knows  it.  And  the  satisfactory  way  in  which  this 
works  out  is  shown  by  the  fact  that  a  large  proportion  of  our 
clerks  stick  to  us.     .     .     . 

Coming  back  to  the  store  —  we  do  not  sell  outside  our  own 
stores  and  we  have  only  one  price.  We  do  not  believe  in  any 
price  regulations  or  in  any  combinations  with  competitors. 

On  the  other  hand,  we  do  not  and  cannot  control  trade- 
marked  brands.  Suppose  we  went  to  work  and  took  a  man's 
goods  and  wanted  to  sell  them  at  six  cents,  when  all  the  other 
dealers  sold  them  at  ten  cents.  We  couldn't  do  it.  We  are 
afraid  to  do  it.  What  we  do  is  to  take  the  same  cigar  and  put 
on  another  name  and  sell  it  at  a  lower  price. 

We  handle  all  the  brands  that  sell,  no  matter  who  makes 
them.  The  American  Tobacco  Company  might  have  pre- 
ferred that  we  sell  only  its  brands,  but  it  could  well  have 
afforded  to  subsidize  us  to  display  other  goods.  Suppose  it 
got  80  per  cent,  of  the  business,  it  could  afford  to  have  us  display 
the  opposition  goods  in  its  windows  for  the  benefit  it  is  in 
creating  business.     .     .     . 

Some  of  our  patrons  who  buy  our  cigars  by  the  box,  and 
some  of  our  clerks  who  like  to  sell  them  that  way,  sometimes 
feel  that  the  United  is  wrong  in  its  policy  of  one  price  for  a 
cigar,  single  or  in  quantity.  The  man  who  buys  in  quantity 
feels  he  ought  to  get  a  special  quantity  price,  and  perhaps 
thinks  that  we  are  taking  advantage  of  him,  and  that  our 
boasted  service  breaks  down  under  that  test. 

As  a  matter  of  fact,  that  very  one-price  is  a  vindication  of 

the  service.     The  saving  which  the  purchaser  of  a  box  would 

have  effected  is  spread  over  the  whole  brand,  and 

Quantity   every  smoker  gets  his  share  of  it.     And,  as  the  man 

the^lJnited  ^^^  buys  two  or  three  cigars  at  a  time  outnumbers 

Stores     the  purchaser  by  the  box  fifty  to  one,  it  is  not  only 

justice  but  good  business.     Thus,  in  a  large  number  of 

instances,  the  usual  selling  practice  is  the  opposite  of  sound 


NEW  TYPES  OF  RETAILER  181 

business  and  will  not  bear  examination.  The  correction  of  just 
a  few  of  these  little  errors  in  a  business  might  be  enough  to 
change  failure  into  success.  It  pays  to  take  a  lot  of  trouble 
where  a  customer  is  concerned. 

One  of  our  patrons,  for  instance,  wrote  us  one  day  that  he 
liked  a  certain  brand  of  cigar  but  did  not  like  the  shape  in 
which  it  was  sold.  He  wanted  to  know  if  it  were  not  possible 
to  make  it  more  in  the  shape  of  the  panetela.  This  was  the 
request  of  just  one  man  out  of  millions  of  our  patrons,  but 
we  did  not  consider  that  it  wa^  too  trivial  for  us  to  consider. 
We  had  the  cigar  made  up  in  the  desired  shape  and  notified 
our  correspondent  when  and  where  he  couU  obtain  it.  The 
effect  of  that  action  on  the  customer  is  not  the  only  thing 
to  be  considered;  there  was  the  effect  on  the  clerks  and  on  the 
office. 

Like  all  other  retail  merchants,  we  have  sensational  prob- 
lems to  meet.  During  the  holiday  season,  for  instance,  our 
stores  would  be  jammed  during  the  last  few  days  and  we  would 
miss  many  sales  as  well  as  afford  an  imperfect  service,  if  we 
did  not  take  some  means  to  spread  the  interest  over  two  or 
three  weeks  instead  of  allowing  it  to  be  concentrated  on  the 
last  days.  So  we  anticipated  the  Christmas  rush  by  making 
unusual  offers.  We  do  not  cut  prices,  but  include  other  things 
in  the  price. 

Take  the  result  of  this  for  just  one  day,  Saturday,  December 

11,  last.     On  that  day  we  did  a  record  business  in  our  thousand 

or  so  stores  of  $410,759,  an  increase  of  23  per  cent. 

I    fo'   ^^^^  ^^^  same  day  last  year.     That  is  an  increase  of 

Day's     $125  in  business  for  each  store  over  last  year. 
Business       The  biggest  business  done  by  any  store  was  $11,667 
—  by  a  store  in  New  York  City.     The  largest  indi- 
vidual sale  was  $2,300,  made  by  a  salesman  in  the  store  at  the 
head  of  Wall  Street  on  Broadway,  New  York. 

January  and  February  are  poor  months  for  selling  cigars. 
Smokers  do  not  enjoy  smoking  out  of  doors  then  so  much  as 
in  other  months.  They  are  also  loaded  up  with  cigars  after 
Christmas.  So  we  have  to  resort  to  schemes  to  keep  up  the 
average. 

Last  January,  for  example,  to  every  purchaser  of  a  pipe 
we  gave  one  half  the  amount  of  his  purchase  in  anything  in 
the  shop.  Another  time,  we  ran  a  pipe  clean-up  sale,  which 
was  very  effective. 


182        ADVERTISING  AS  A  BUSINESS  FORCE 

The  special  sales  give  us  an  opportunity  to  put  news  value 
into  our  advertising.  Ordinarily  the  advertising  has  to  be  in 
the  nature  of  a  daily  reminder  —  our  name,  shield,  trade-mark 
and  a  few  words  in  plain  type,  made  to  stick  out  from  the  page 
by  the  use  of  plenty  of  white  space.  When  we  have  news  to 
tell  we  use  more  words. 

We  believe  the  principles  on  which  the  United  Cigar  Stores 
are  conducted  are  bound  to  prevail  and,  consequently,  that 
business  conducted  on  any  other  basis  wall  have  to  reform  or 
go  out  of  existence.  But  we  are  very  far  from  being  a  monopoly, 
fast  as  our  chain  is  growing.  There  are  12,000  retail  cigar 
stores  in  New  York  City  and  we  have  only  300  of  them,  and, 
though  we  do  a  very  large  proportionate  share  of  the  business, 
it  is  still  only  25  or  30  per  cent,  of  the  whole.  Outside  of 
New  York,  of  course,  our  share  of  the  total  business  is  very 
much  less. 

Moreover  (and  this  is  worth  while  considering),  our  methods 
have  lifted  the  retail  cigar  business  all  along  the  line.  When 
we  began,  our  methods  were  revolutionary.  To-day  it  is 
possible  to  find  a  great  many  independent  stores  which,  per- 
haps, are  just  as  attractive  as  ours.  The  whole  tone  is  higher. 
You  will  often  notice  ladies  accompanying  their  husbands  into 
our  cigar  stores.  That  was  an  unheard  of  thing  in  the  old 
days,  and  the  change  is  something  we  take  credit  for. 

This  description  of  the  methods  and  organization  of  the 
United  Cigar  Stores  has  been  reproduced  at  length  because 
this  chain  has  gone  as  far  as  any  in  grasping  the  buying  and 
selling  possibilities  of  the  chain-store  idea. 

Its  significance  to  the  advertising  man  lies  chiefly  in  its 
suggestions  of  future  possibilities.  If  a  chain  of  grocery  stores 
should  do  for  the  grocery  business  of  St.  Louis,  for  instance, 
what  the  United  Cigar  Stores  have  done  for  the  cigar  trade  of 
a  number  of  cities,  and  if  the  St.  Louis  success  should  be  repeated 
in  a  half  dozen  cities,  the  business  of  advertising  groceries  in 
those  places  would  be  revolutionized  in  a  very  short  time. 
And  this  is  not  altogether  prophetic. 

The  chain-store  idea  is  extending  rapidly  through  the  United 
States,  being  particularly  successful  in  such  lines  as  groceries 


NEW  TYPES  OF  RETAILERS  183 

and  drugs,  or  similar  lines  where  the  unit  of  sale  is  small  and 
where  most  of  the  products  handled  are  for  personal  consump- 
tion. The  extension  of  this  movement  is  thus  described  by 
S.  C.  Lambert,  who  begins  his  discussion  by  quoting  H.  S. 
Collins,  Vice-President  of  the  United  Cigar  Stores  Company: 

*  .  .  .  .  "The  chain  store  in  America  is  no  man's  in- 
vention," continues  Mr.  Collins.  "  It  is  an  inevitable  outgrowth 
of  economic  conditions.  It  was  made  possible  by  the 
'^f'f/^y^^  development  of  the  telegraph,  the  railroads,  the  mail, 
"'Store  Idea  ''^^^^  ^^^  ^^^^  other  influences  which  have  made  the 
United  States  one  community  instead  of  half  a 
hundred.  A  hundred  years  ago  it  would  have  been  imprac- 
ticable for  any  manufacturer  to  have  a  number  of  retail  outlets 
scattered  in  various  parts  of  the  land.  A  proper  control  of 
them  would  have  been  frustrated  by  the  segregating  factors  of 
distance,  of  lack  of  quick  communication  and  of  quick  shipments. 

"But  note  what  took  place  when  the  territory  of  Great 
Britain  became  knit  together  into  one  trade  unit.  What  we 
call  chain  stores  sprang  up  there,  and  were  in  successful  opera- 
tion long  before  a  truly  national  chain  was  possible  in  the 
vastly  larger  domain  of  the  United  States.  Boots,  Limited, 
has  been  operating  over  500  drug  stores  in  the  United  Kingdom. 
Sir  Thomas  Lipton  has  had  3,000  or  so  coffee  stores.  The 
Imperial  Tobacco  Company  has  been  selling  through  retail 
outlets  all  over  the  United  Kingdom  for  years.  Germany 
can  show  similar  examples. 

"When  the  physical  conditions  were  right  for  the  chain 
stores  in  the  United  States  they  inevitably  began  to  grow. 
The  old  methods  of  distribution  and  selling  were  inconvenient 
and  unprofitable  to  the  manufacturer  or  importer,  and  costly 
to  the  consumer.  Speaking  of  the  United  States,  we  are  able 
through  our  chain  to  dispose  of  goods  with  greater  dispatch 
and  less  cost  to  us,  and,  therefore,  to  give  the  consumer  fresher 
tobacco  at  lower  prices.  We  save  the  intermediate  cost  of 
handling,  and  depend  for  our  sales  upon  the  volume  of  business. 
Being  compelled  to  rely  upon  volume,  we  have  had  to  develop 
a  United  sale  spirit  of  efficiency  and  courtesy  to  secure  this 
volume. 


"Printer^  Ink,  June  16,  1910,  p.  3. 


184        ADVERTISING  AS  A  BUSINESS  FORCE 

"While  the  United  States  was  not  the  first  to  see  the 
establishment  of  a  chain  of  stores,  I  believe  that  in  this  country 
will  be  the  greatest  development  of  the  idea.  The  rapid 
growth  of  population,  accompanying  an  increasing  solidarity 
of  the  fields  of  trade,  gives  me  reason  to  anticipate  a  linking 
up  of  'chains'  in  many  other  lines  of  merchandise."     .     .     . 

Mr.  Lambert  discussing  the  spread  of  the  chain-store  idea 

says: 

The  plans  for  a  number  of  grocery  and  drug  store  chains 
are  now  familiar  to  many,  and  it  is  inconceivable  that  more 
will  not  follow.  There  are  preparations  on  foot  for  a  chain 
of  stores  as  outlets  for  a  line  of  ready-made  clothes  for  men. 
Similar  stores  for  lines  of  trade-marked  suits  for  women  are 
sure  to  come,  for  even  now  fashionable  modistes  selling  gowns 
for  women  operate  shops  in  half  a  dozen  cities,  and  only  lack 
capital  for  starting  more  branches. 

Shoe  manufacturers,  like  Regal,  Hanan,  Hanover,  etc.,  have 
already  plentifully  demonstrated  the  strength  of  the  store 
chain.  Only  sufficient  capital  and  organization  prevent  many 
present  chains  from  enlarging  very  much  more.  As  the  type- 
writer and  sewing  machine  companies  have  learned,  it  takes 
a  lot  of  money  and  a  powerful,  able  organization  to  maintain 
a  system  of  hundreds  of  branches;  but  not  one  of  them  but  is 
certain  that  it  is  the  only  forceful  method  of  distribution.  To 
them  the  suggestion  to  turn  their  machines  over  to  retailers  on 
the  present  plan  of  the  large  volume  of  hardware,  drugs  and 
groceries,  etc.,  is  entirely  impossible.  They  know  the  supreme 
importance  of  controlling  their  own  outlets  —  and  their  wisdom 
is  permeating  rapidly  into  every  sort  of  merchandising. 

*Because  the  United  Cigar  Stores  chain  came  into  being 
full-blown,  as  it  were,  it  has  not  had  to  face  the  difficulties 
confronting  some  other  concerns  which  are  now  developing 
a  similar  system.  Many  manufacturers  who  some  day  will 
be  operating  a  number  of  co-ordinate  stores  in  various  cities 
are  now  selling  through  special  representatives  or  exclusive 
agencies.  To  take  full  advantage  of  the  chain-store  idea 
they  must,  one  would  hazard,  gradually  abandon  the  present 
system.     And  this  means  complications. 

*Pnnters'  Ink,  June  23,  1910,  p.  16. 


NEW  TYPES  OF  RETAILER  185 

Huyler,  the  New  York  candy  manufacturer,  is  in  this  stage 
of  transition.  He  has  been  a  national  advertiser  for  years. 
He  has  established  scores  of  exclusive  agencies  in  order  to 
realize  the  profits  of  his  advertising.  In  the  course  of  time 
the  retail  man  handling  Huyler's,  along  with  other  goods,  has 
come  to  place  a  high  value  upon  this  line.  He  has  often 
worked  faithfully  to  build  business  for  Huyler's;  he  has  lent 
a  hand,  more  or  less  willing,  to  place  the  goods  in  the  neighbor- 
hood. The  chain-store  development  he  possibly  regards  as 
detrimental  to  the  future  of  his  exclusive  agency  business. 

As  for  the  company,  it  cannot  at  once  abandon  its  agencies 
for  special  stores.  The  temporary  relaxation  of  business  and 
the  drain  upon  finances  incident  to  building  quickly  a  complete 
chain  forbid  this.  Growth  into  the  new  scheme  of  retailing, 
therefore,  raises  some  very  nice  questions  of  policy. 

Huyler's  exclusive  agencies  are  thoroughly  alive  to  the 
branch-store  trend.  They  have  watched  one  store  after  another 
open  to  sell  only  Huyler's  products.  Some  of  them  have  been 
intelligent  enough  to  ask  what  bearing  Huyler's  development 
of  about  two  new  stores  a  year  will  have  upon  their  Huyler 
business.  Inevitably  they  are  wondering  if  they  are  going 
to  be  crowded  off  the  boards  as  far  as  handling  Huyler's  is 
concerned. 

To  meet  such  a  state  of  mind  the  manufacturer  has  spread 
the  news  among  them  that  he  will  not  open  a  store  in  a  neigh- 
borhood in  which  an  agent  now  satisfactorily  operates. 
The  Huyler  j^  is  well  known  in  trade  circles  in  New  York  that 

System  Huyler  has  refused  to  open  a  store  opposite  the  Grand 
Central  Station  in  New  York,  although  more  than  once 
he  has  been  offered  an  ideal  place.  His  statement  has  been 
that  he  is  well  represented  there  by  an  agent  who  is  heartily 
pushing  candy  sales,  and  that  it  is  his  policy  not  to  sweep  to 
one  side  a  representative  who  for  a  period  of  years  has  effi- 
ciently built  up  business. 

Judging  from  the  stores  that  the  Huyler  Company  has 
already  opened  in  various  cities,  it  seems  to  be  the  policy 
to  open  a  chain  store  only  in  new  parts  of  growing  towns, 
w^here  there  is  no  special  agency.  One  is  bound  to  speculate 
whether  the  exclusive  agency  and  the  chain  store,  offshoots  of 
the  same  concern,  can  indefinitely  run  along  side  by  side. 
Perhaps  the  Huyler  company  will  succeed  in  making  these  two 
methods  of  retailing  dwell  in  peace  and  unimpaired   value 


186        ADVERTISING  AS  A  BUSINESS  FORCE 

together  in  the  same  town.  At  any  rate,  not  only  the  trade, 
but  also  other  manufacturers  facing  similar  conditions  are 
keenly  interested  in  watching  to  see  how  the  endeavor  turns 
out. 

Browning,  King  &  Co.,  of  New  York  and  fifteen  other  cities, 

are  a  simon-pure  example  of  a  growth  of  a  chain  from  a  single 

store.     Nowhere  along  the  line  has  development  been 

The      attended  by  exclusive  agencies.     This  company  man- 

Brmiming  ufactures   men's   clothes  and  sells  them  through  its 

Cl"t^of  °^^  stores,  making  its  argument  to  the  public  on  the 

Clothing  basis  of  maker-to-user  economy.  One  recent  adver- 
Stores  tisement  had  a  paragraph  arguing  that  because  the 
company  was  both  a  manufacturer  and  a  retailer  at 
once,  it  could  furnish  garments  at  a  saving  of  from  a  quarter 
to  a  third.  Consumers  are  also  told  of  the  buying  ability 
of  the  house.  With  seventeen  stores  in  fifteen  cities  it  is 
able  to  secure  good  discounts  on  both  materials  and  other 
items  like  insurance.  It  is  roughly  estimated  that  such  dis- 
counts amount  to  a  yearly  total  of  $75,000  to  $100,000  — 
representing  that  much  net  margin  within  which  to  meet  compe- 
tition on  an  equal  basis. 

The  chain-store  proposition  has  a  peculiar  merit  in  a  business 
like  that  of  clothing.  The  manufacturer  is  able  to  control 
his  output  almost  absolutely;  that  means  that  as  a  retailer  he 
is  able  to  avoid  being  "short"  or  "long"  on  any  line.  Trade 
demands  are  carefully  calculated  in  advance  and  orders  placed 
accordingly.  If  a  line  "goes"  more  quickly  than  expected  a 
special  order  is  hurried  through  the  shops  on  a  special  schedule. 
With  both  the  field  of  manufacturing  and  retailing  under  its 
eye  the  company  is  able  to  trim  its  sails  quickly.  In  this  case 
the  manufacturer  does  not  unload  upon  the  retailer,  as  some- 
times happens  to  an  independent  retailer  whose  judgment 
in  buying  is  formed  from  meagre  facts  in  his  narrow  field. 

For  a  concern  that  is  credited  with  being  the  first  to  operate 

a  large  chain  of  stores  in  this  country,  the  Great  Atlantic  and 

Pacific  Tea  Company  has    been  making  very   little 

Atlantic    noise.     It  began  to   expand  in    1859  and  has   been 
°^g^  (i^-^^  growing  rapidly,  until  to-day  the  number  of   stores 
is  360. 

One  of  its  officers  expressed  himself  as  follows:  "The  idea 
in  the  beginning  was  a  bold  one.  It  struck  at  the  very  founda- 
tion of  the  routine  traffic  of  the  middleman.     We  have  never 


NEW  TYPES  OF  RETAILER  187 

lost  faith  in  the  principle  that  the  nearer  the  producer  and  the 
consumer  can  be  brought  together  by  avoiding  all  intermediate 
transfers,  the  better  will  it  be  for  both  producer  and  consumer. 
One  hundred  exchanges  can  add  nothing  to  the  real  value 
of  an  article,  although  it  may  add  many  hundred  per  cent, 
to  the  price. 

"  We  are  growing  at  the  rate  of  one  store  a  week.  Our  cus- 
tomers comprise  nearly  4,000,000  individuals.  Our  individual 
sales  number  125,000,000  a  year.  We  import  our  teas  and  coffees 
by  the  ship  load;  we  buy  the  crops  of  an  entire  countryside." 

The  first  thing  that  a  manufacturer  with  chain-store  ambi- 
tions is  apt  to  ask  himself  is:  "Where  can  I  best  open  stores; 
and  if  I  desire  more  than  one  in  a  city,  how  can  I  find 
Selecting   q^^   jJ^q   l3Pg|^   places.?"      Scientific  analysis    of    this 

C^mm     niatter  is  now  made. 

Stores  Except  in  the  South  the  United  Cigar  Stores  Com- 
pany is  operating  stores  in  most  of  the  large  cities.  If 
it  decides  to  go  into  a  new  town,  that  town  is  selected  upon 
the  basis  of  population  and  general  business  health.  George  J. 
Whelan,  president,  has  collected  figures  showing  the  cigar-buy- 
ing ability  of  different  centres.  In  his  statement  he  says  that 
the  per  capita  buying  power  of  New  York  is  $1.74  a  year; 
Chicago,  63  cents;  St.  Louis,  $1.21;  Rochester,  99  cents; 
Spokane,  60  cents;  San  Francisco,  $4.06;  Milwaukee,  22  cents; 
Atlantic  City,  $2.55. 

These  data  are  valuable  in  determining  not  only  what  town 
to  enter,  but  also  how  much  of  the  business  the  company  is 
securing  if  it  has  a  store  in  a  town. 

In  selecting  a  new  site,  men  are  placed  at  corners  or  at  mid- 
block  stations,  if  no  corner  is  available,  to  count  the  number  of 
persons  who  pass  in  a  day.  A  steady  stream  through  the 
day  is  figured  as  better  for  a  prospective  store  than  a  much 
larger  crowd  that  takes  the  form  of  a  noonday  rush  or  a  home- 
ward bound  jam. 

Thus  far  the  drygoods  business  has  shown  little  tendency 
to  adopt  the  chain-store  idea.  It  is  argued  in  that  trade  that 
there  are  many  factors  which  make  a  department-store  form  of 
organization  more  satisfactory  than  the  chain-store  form. 
Mr,  Lambert  seems  to  think  he  sees  a  drift  toward  chain  stores 
even  in  drygoods. 


188        ADVERTISING  AS  A  BUSINESS  FORCE 

*One  finds  himself  in  a  curious  maze  of  cross  currents  when 
he  tries  to  ascertain  whether  or  not  there  is  a  tendency  to 
chain-store  growth  in  the  drygoods  field.  It  is  a  conflict  of 
interpretation  of  developments  rather  than  any  uncertainty  in 
working  out  of  drygoods  selling  policies. 

The  outside  observer,  after  an  examination  of  the  leading 
facts  in  the  retail  drygoods  business,  would  be  inclined  to 
assert  without  hesitation  that  evidences  indicate  a  progress 
toward  an  extension  of  retail  outlets.  Most  impressive  is  the 
rapid  growth  of  the  H.  B.  Claflin  Company,  of  New  York. 
This  concern  is  the  wholesale  branch  of  the  Associated  Mer- 
chants Company,  which  is  controlled  in  turn  by  the  United 
Drygoods  Company,  with  a  capital  of  $51,000,000.  But  inas- 
much as  John  Claflin,  president  of  the  H.  B.  Claflin  Company, 
is  a  dominant  factor  in  the  Associated  Merchants  Company, 
the  Claflin  interests  are  generally  considered  as  being  in  control 
of  the  system  of  drygoods  stores  that  covers  the  East. 

Some  men  who  are  so  well  informed  about  drygoods  that 

they  are  everywhere  rated  as  authorities  seem  disposed  to  turn 

their  heads  away  from  the  significance  of  the  Claflin 

The  CAain- activities.     Even  the  recent  taking  over  of  Lord  & 

Store  Idea  'faylor,  and  the  more  recent  acquisition  of  the  Tefl^t- 

Drygoods  Weller  Company,  with  a  capital  of  $3,000,000,  by  the 

Trade  H.  B.  Claflin  Company,  have  not  served  to  alter  the 
opinion  entertained  by  the  authorities  referred  to 
that  the  drygoods  business  is,  by  reason  of  its  peculiar  nature, 
exempt  from  the  chain-store  plan. 

Are  these  men  so  close  to  their  proposition  that  they  haven't 
a  proper  perspective  of  the  situation?  It  is  interesting  to 
inquire  whether  the  investigating  layman  is  right  in  his  idea 
that  such  is  the  case. 

Those  who  maintain  that  there  is  and  has  been  for  two  or 
three  years  a  rapid  branching  out  which  is  essentially  an  adop- 
tion of  the  chain-store  plan  have  some  convincing  facts  at 
hand.  In  the  first  place  the  H.  B.  Claflin  interests  control, 
besides  Lord  &  Taylor  and  the  Tefft-Weller  companies,  the 
following  large  retail  establishments:  The  James  McCreery 
Company,  with  Twenty-third  and  Thirty-fourth  street  stores; 
Stewart  &  Co.,  of  Baltimore  (formerly  Posner  Brothers); 
$300,000  of  the  $250,000  common  stock  of  the  C.  G.  Gunther's 


*Pnnters  Ink,  July  21,  1910,  p.  32. 


NEW  TYPES  OF  RETAILER  189 

Sons,  furriers,  New  York;  J.  N.  Adam  &  Co.,  of  Buffalo; 
$2,400,000  of  the  $3,000,000  income  bonds  and  800  of  the 
1,000  shares  of  the  O'Neill- Adams  Company  (formerly  H. 
O'Neill  &  Co.,  and  the  Adams  Drygoods  Company);  Hahne 
&:  Co.,  of  Newark;  the  Powers  Mercantile  Company,  of  Minne- 
apolis; the  William  Hengerer  Company,  of  Buffalo,  and  the 
Stewart  Drygoods  Company,  of  Louisville. 

Then,  besides,  there  are  the  two  great  stores  of  Wanamaker 
in  New  York  and  Philadelphia;  the  Gimbel  stores  in  Phila- 
delphia, Milwaukee,  and  now  New  York;  the  May  stores  in 
St.  Louis  and  Cleveland,  and  a  number  of  other  drygoods 
retail  concerns  which  operate  stores  in  their  "home"  town 
and  two  or  three  other  places  relatively  near  by  —  an  interesting 
example  of  which  is  the  Dives,  Pomeroy  &  Stewart  string  of 
stores  in  Reading,  Harrisburg,  Altoona,  Pottstown,  Pa., 
Chattanooga,  Tenn.,  etc. 

It  will  not  do  to  argue  that  these  are  not  indications  of  a 
chain-store  trend  merely  because  they  are  not  in  all  cases 
bound  together  with  one  and  the  same  name,  like  the  United 
Cigar  Stores  Company.  They  are  controlled  by  the  same 
minds  and  operated  harmoniously  to  bring  about  the  chief 
interests  of  their  promoter.  Through  them  may  be  marketed 
stocks  bought  perhaps  at  a  bargain.  In  them  may  be  working 
out  the  same  policies  of  retail  selling.  The  "Famous,"  of  St. 
Louis,  and  the  May  Store,  of  Cleveland,  are  no  less  a  unit 
because  they  bear  different  titles. 

On  the  other  hand,  what  is  the  argument  of  those  who  say 
that  the  chain-store  system  has  no  vital  part  to  play  in  the 
selling  of  drygoods.?  The  composite  opinion  of  those  men 
whose  views  are  considered  weighty  is  practically  this:  The 
retail  drygoods  business  won't  stand  the  planing  down 
necessary  to  the  chain-store  operation.  It  is  peculiarly  a 
business  in  which  personality  is  necessary.  A  store  as  large 
as  the  largest  may  be  operating  on,  say,  State  Street,  Chicago. 
A  smaller  establishment  just  above  on  the  corner  has  a  pro- 
prietor on  the  spot  whose  tastes  are  most  discriminating,  whose 
anticipations  of  feminine  choice  are  unfailingly  accurate,  whose 
skill  in  the  display  of  goods  is  refined  and  unfailingly  tempting. 
By  so  impressing  these  personal  qualifications  upon  his  store 
he  may  easily  pull  much  of  the  best  trade  away  from  his  big 
competitor,  whose  operations  are  mechanically  gauged  from 
the  distant  home  office  and  whose  store  service  would  perhaps 


190        ADVERTISING  AS  A  BUSINESS  FORCE 

lack  the  finishing  satisfactory  touch  which  the  presence  and 
oversight  of  the  proprietor  alone  can  give. 

In  a  word,  it  is  difficult  to  standardize  the  drygoods  business. 
A  store  which  may  be  brilliantly  successful  on  Fifth  Avenue, 
New  York,  would  fizzle  dismally  on  Washington  Street,  Boston. 
The  two  publics  are  radically  different  in  tastes.  The  policy 
that  built  an  envious  success  in  New  York  would  meet  its 
Waterloo  in  the  "Hub." 

And  so  on  through  the  country.  No  two  cities  are  exactly 
similar  in  temperament  and  buying  disposition.  It  is  urged 
that  a  rigid  system  would  be  fatal  if  inaugurated  in  a  chain 
of  retail  drygoods  stores  in  Buffalo,  St.  Louis,  Louisville  and 
Minneapolis. 

One   of   the   gentlemen   who   was    most  pronounced  in  his 

assertion  that  the  chain-store  plan  was  no  more  than  a  bogy, 

as  far  as  drygoods  were  concerned,  recalled  the  ex- 

Wfiy      perience  of  a  "  merchant  prince "  of  New  York,  who 

Chains  of  j^^g  since  acquired  an  interest  in  two  or  three  other 

Stores  Have^^^S^  department  stores.     This  man  made  his  repu- 

Trouhles   tation  in  lower  Sixth  Avenue,  New  York.     He  had 

had  a  hand  in  founding  a  mammoth  store  in  Chicago. 

He  made  up  his  mind  to  open  an  establishment  for  the  "elite" 

in  Chicago.     He  did  so.     His  name  was  over  the  door.     And, 

according  to  reports,  this  is  what  happened:   A  woman  would 

shop  through  the  older  store  in  Chicago.     She  would  wander 

over  to   the   "elite"   emporium,   see  the  display,   notice  the 

name  on  the  store,  and  say:    "Oh,  there  is  no  use  in  going 

in  here.     It  is  Blank's  store,  and  we  have  just  been  in  his  other 

one.     Let's  go  over  to  Marshall  Field's  —  he's  got  an  entirely 

different  line  of  goods." 

The  ambitious  merchant  had  so  closely  identified  his  name 
with  one  grade  of  store  service  and  merchandising  that  he  was 
literally  iron-bound  when  he  attempted  to  soar  to  a  higher 
retail  condition. 

And  here  was  another  "clincher"  that  was  adduced  by 
"the  negative":  "Do  you  think  that  a  merchant  from  the 
lower  Sixth  Avenue  is  temperamentally  able  to  operate  in  a 
way  that  would  be  most  desirable  on  Fifth  Avenue,  New  York, 
above  Thirtieth  Street?  Do  you  think  that  he  could  bring 
himself  to  pay  $10,000  a  year  to  some  Beau  Brummcl  to 
stand  about  and  do  nothing  except  to  put  out  a  highly  mani- 
cured hand  to  the  lady  who  came  from  upper  Fifth  Avenue 


NEW  TYPES  OF  RETAILER  191 

and  greet  her  graciously?  I  believe  that  he  would  chew  his  mous- 
tache in  his  office  a  while,  finally  kick  himself  for  maintaining 
such  'useless'  flummery  and  discharge  his  faultless  mannered 
and  specklessly  groomed  reception  man.  He  would  abolish 
those  refinements  that  would  be  necessary  to  give  tone  to  his 
establishment.  Think  of  a  man  like  that  trying  to  extend  a 
chain  over  the  country!" 

The  weakness  of  such  an  argument  is  instantly  obvious  when 
it  is  stated  that  the  Claflin  stores  operate  under  their  local 
management.  When  the  Claflins  acquire  control  the  store 
policy  that  has  been  evolved  in  answer  to  peculiar  requirements 
is  in  no  wise  changed.  Lord  &  Taylor,  it  is  announced,  will 
be,  so  far  as  the  store  visitor  can  perceive,  the  Lord  &  Taylor  of 
old.  The  Claflin  influence  will  show  only  on  the  books  in 
the  back  office.  It  is  interesting  to  note  that  most  of  these 
stores  have  absolutely  their  own  organization,  even  to  the 
buyers.  The  two  May  stores  have  their  separate  buyers,  as 
have  the  two  Wanamaker  shops.  But  who  shall  say  that  the 
Claflin  stores  are  not  chain  stores,  notwithstanding.? 

The  chain-store  idea  in  the  music  field  is  growing.   The  Music 

Trades  referred  to  these  articles  in  Printers'  Ink  and  printed  a 

surprising  list  of  chan  stores.     It  asserts  that   the 

Chains    chain  system  is  developing  rapidly.     In  instances  the 

Stores^  resultant  advantages  in  buying,  advertising,  and 
shipping.  The  list  which  the  Music  Trades  publishes 
is  partly  as  follows: 

The  .(Eolian  Company  —  New  York,  Chicago,  St.  Louis,  Indianapolis, 
Dayton. 

The  Baldwin  Company  —  San  Francisco,  Denver,  Chicago,  Aurora,  Indian- 
apolis, Muncie,  Terre  Haute,  Louisville,  Boston,  Kansas  City,  St.  Louis, 
Knox\'ille. 

W.  W.  Kimball  Company  —  Chicago,  Minneapolis,  St.  Paul,  Kansas  City, 
Elgin,  Freeport,  Peoria,  Quincy,  Rockford,  Springfield,  Terre  Haute,  Detroit, 
Bellevue,  la.,  Des  Moines,  Grand  Rapids,  Kalamazoo,  Brainerd,  Minn., 
Mankato,  Aurora. 

The  Cable  Company  —  Chicago,  Richmond,  Va.,  Jacksonville,  Detroit, 
Atlanta,  New  Orleans,  Belle\nie,  la.,  Calumet,  Mich.,  Cadillac,  Mich.,  Hancock, 
Mich.,  Menominee,  Traverse  City,  Durham,  N.  C,  Greensboro,  N.  C, 
Minneapolis,  St.   Paul,  Charleston,  Knoxville. 

The  John  Church  Company  —  New  York,  Cincinnati,  Boston,  Dallas, 
Chattanooga,  Chicago. 

The  Mason  &  Hamlin  Company  —  New  York,  Boston,  Providence. 

The  Hallet  &  Davis  Piano  Company  —  Boston,  Newark,  New  Bedford, 
Somerville,  Toledo,  Plainfield,  N.  J.,  Jackson\'ille,  Fla.,  Patexson,  N.  J. 

The  Estey  Company  —  New  York,  Philadelphia,  Boston,  St.  Louis. 


192        ADVERTISING  AS  A  BUSINESS  FORCE 

R.  Wiirlitzer  Company  —  Cincinnati,  New  York,  Chicago,  Philadelphia, 
Columbus. 

Starr  Piano  Company  —  Richmond,  Ind.,  Cincinnati,  Indianapolis,  Cleve- 
land, Los  Angeles,  Muncie,  Hartford  City,  Dayton,  O.,  Lorain,  O.,  Middle- 
towTi,  O..  Piqua,  O.,  Springfield,  O.,  Toledo,  O. 

The  Eilers  Music  Company  —  San  Francisco,  Eureka,  Oakland,  San  Jose, 
Stockton,  Boise,  Ida.,  Portland,  Ore.,  Albany,  Ore.,  Oregon  City,  Ore.,  The 
Dallas,  Ore.,  Bellingham,  Wash.,  Seattle,  Spokane,  Tacoma,  Walla  Walla. 

The  W.  A.  Leyhe  Piano  Company  has  opened  nine  Texas 
stores  in  about  two  years.  The  movement  is  rapidly  progress- 
ing in  other  sections. 

The  Cokmibia  Phonograph  Company  operates  a  number  of 
stores  in  various  cities;  while  the  Victor  Company,  however, 
sells  only  through  agents. 

In  addition  there  are  about  two  hundred  stores  owned  by 
thirty  music  companies  in  cities  of  medium  size. 

In  a  general  way  other  advertisers  have  gone  into  the  chain- 
store  movement  almost  unconsciously.  Local  conditions  com- 
pelled, perhaps,  the  opening  of  one  store,  and  then 
Some  others  followed  without  scarcely  any  effort  —  just  a 
I  ^^^rt  nt  seemingly    inevitable    drift    of    necessity.     In    such 

Chains  lines  as  stationery  and  office  equipment,  retail  out- 
lets have  been  so  unsatisfactory  that  branch  stores 
have  been  imperative.  Yawman  &  Erbe  have  stores  in  New 
York,  Chicago,  Washington,  Philadelphia,  Boston,  Pittsburgh, 
San  Francisco,  St.  Louis,  Cleveland,  Los  Angeles,  Toronto, 
Winnipeg,  Vancouver,  Ottawa,  Montreal.  The  Prince  Furni- 
ture stores  in  Allentown,  Rochester,  Hazleton,  etc.,  is  an 
interesting  development  in  an  unexpected  line  of  goods. 

The  Singer  Sewing  Machine  Company  always  had  chains 
of  stores  in  cities  throughout  the  country,  and  much  of  its 
independence  and  trade  strength  is  due  thereto.  The  Water- 
man Fountain  Pen  folk  have  been  forced  to  establish  some 
stores,  and  manufacturers  with  articles  like  Lion  Brand  collars 
and  shirts,  Crawford  shoes,  etc.,  have  several  stores  to  their 
credit. 

The  Washington  Shirt  Company,  Chicago,  has  a  number  of 
stores.  Through  the  firm  of  Weber  &  Heilbronner,  New  York, 
The  Manhattan  Shirt  Company  operates  a  chain  of  nine  stores 
in  that  metropolis  which  sells  only  Manhattan  shirts,  etc. 

Edgar  A.  Russell,  formerly  with  the  Multigraph  Company, 
has  started  an  unique  enterprise  called  the  Berkley  Associated 
Stores  of  America,  which  is  a  co-operative  catalogue  buying 


NEW  TYPES  OF  RETAILER  193 

house  for  retailers  —  an  interesting  subdivision  of  the  syndicate 
selHng  idea. 

So  it  would  seem  that  the  chain  of  stores  movement  has 
been  swelling  to  proportions  really  unexpected  in  the  past  decade 
and  is  as  yet  only  in  its  early  stages  of  development.  It  may 
be  watched  with  profound  interest  by  every  manufacturer, 
retailer,  and  jobber. 

One  other  phase  of  the  chain-store  movement  is  suggested 

by  the  possibility  of  concentrating   the  ownership  of  various 

chains.     Early  in  1912  it  was  rumored  that  efforts 
Combina-  i     •  .      ,  i-j    .  i  p    .i 

tions  of    were   bemg   made  to  consolidate    a  number  oi  the 

Chain     largest  grocery-store  chains  in  various  parts  of   the 

country.     Commenting  on  this,  Printers''  Ink  (May  2, 

1912,  p.  74)  contained  an  editorial  from  which  the  following 

paragraphs  are  taken: 

If  the  proposed  merger  of  big  grocery  chain-store  systems 
in  the  leading  cities  of  the  East  should  become  a  fact,  it  would 
be  a  very  big  fact,  indeed.  It  would  directly  involve  not  only 
some  3,000  retail  groceries,  but  indirectly  influence  and  control 
possibly  as  many  more,  for  whom  the  combine  would  buy  and 
the  extension  of  the  system  through  the  rest  of  the  country 
would  undoubtedly  follow. 

But  the  one  point  before  all  others  that  should  interest 
national  advertisers  is  the  intention  of  the  promoters  to  -push 
the  ^private  brands  of  the  combine  in  its  stores,  w^hich,  if  successful, 
of  course,  means  the  displacement  of  many  advertised  specialties. 

These  promoters  are  David  L.  Remley  and  Jacob  Maurer, 
proprietors  of  a  chain-store  system  in  St.  Louis.  They  have 
been  at  work  on  the  plans  for  months,  and  are  said  to  be  now 
sanguine  of  early  success.  The  field  of  their  activities  is  thus 
described  by  the  Journal  of  Commerce  of  New  York: 

The  principal  branch  stores  of  the  company  are:  The  G inter  Company,  6; 
Michael  O'Keefe,  130;  the  O'Connor  chain  stores,  40,  and  E.  E.  Gray,  22. 
All  of  these  are  in  Boston. 

In  New  York  there  are  the  stores  of  James  Butler,  Inc.,  200;  Andrew  Davey, 
34;  the  Atlantic  &  Pacific  Tea  Company,  100;  Park  &  Tilford,  9. 

Brookl;yn  has  two  systems,  those  of  Thomas  Roulston,  83  stores,  and  H. 
C.  Bohack,  18. 

Wm.  Butler  has  140  stores  in  Philadelphia,  and  Thomas  Hunter  has  100. 

The  Butler  chain  stores  in  Pittsburgh  number  34. 


194        ADVERTISING  AS  A  BUSINESS  FORCE 

In  Washington  there  are  four  systems  —  the  Sanitary  Grocer  Company,  33 
stores;  J.  T.  D.  Pyles,  18;  Great  Atlantic  &  Pacific,  11,  and  the  United  Stores 
Company,  6. 

H.  G.  Hill,  who  started  the  chain  in  St.  Louis  now  owoied  by  Maurer  & 
Remley,  has  31  retail  groceries  in  Nashville  and  Birmingham,  while  Maurer- 
Remley  own  29  here  (St.  Louis). 

Duke  C.  Bowers,  Memphis,  has  37  stores;  Rogers  in  Atlanta,  Ga.,  has  28, 
and  the  Kroeger  Grocer  &  Baking  Company  of  Cincinnati  has  85. 

There  are  at  least  a  dozen  other  systems  in  New  York  and  other  points 
whose  stores  combined  number  more  than  300,  including  the  Hazel  Pure 
Food  Company  of  Chicago. 

Among  the  principal  foreign  establishments  is  that  of  Sir  Thomas  Lipton, 
England,  with  3,000  branch  retail  stores,  and  a  French  chain  operating  about 
600  stores. 

Inquiries  made  by  Printers^  Ink  of  a  number  of  the  sys- 
tems named  elicited  formal  denials  of  any  knowledge  as  to 
negotiations  looking  to  amalgamation.  There  probably  is, 
therefore,  no  reason  to  take  the  matter  very  seriously  at  this 
time,  except  as  a  straw,  and  perhaps  only  the  ghost  of  a  straw 
at  that. 

But  whether  or  not  the  amalgamation  is  put  through  now 
there  is  one  thing  in  the  story  that  should  not  be  overlooked. 
Things  are  happening  faster  in  the  retail  field  than  they  used 
to  happen;  mergers  will  have  to  come  in  time,  just  as  they  had 
to  do  at  the  producing  end.     It  is  evolution. 

Three  years  ago  President  Whelan,  of  the  United  Cigar 
Stores,  predicted  that  within  a  half  decade  the  retail  machinery 
of  the  country  would  be  revolutionized.  There  were  no  pro- 
nounced signs  at  the  time  to  justify  the  prediction,  but  Mr. 
\ATielan  had  made  a  close  study  of  retail  conditions,  and  he 
sensed  the  coming  changes  before  the  majority  of  business 
men  were  aware  of  anything  unusual  going  on. 

Chain-store  systems  can  hardly  help  following  the  common 
course  of  business.  They  will  grow,  compete  with  each  other, 
and  begin  to  combine.  And  in  the  course  of  competition  they 
will  exhaust  every  expedient  to  make  and  save  profits.  They 
will  make  the  fullest  use  of  the  advantage  given  them  by  their 
large  buying  power  in  dealing  with  individual  manufacturers, 
both  those  who  advertise  and  those  who  do  not. 

Is  it  likely  that  they  will  long  respect  the  popular  preference 
for  advertised  and  trade-marked  brands.''  On  the  contrary, 
they  have  already  announced  their  intention  of  pushing  their 
own  private  brands,  and  that  is  natural  and  to  be  expected. 

What   are   advertisers   going   to   do   about    it?     What    can 


NEW  TYPES  OF  RETAILER  195 

advertising  do  when  the  machinery  of  distribution  is  being 
taken  away? 

To  combine  and  dictate  prices  to  the  chain  stores  or  treat 
with  them  on  the  basis  of  some  trade  agreement  might  be 
feasible  for  a  time,  if  the  law  permitted.  It  is  hardly  likely 
that  such  a  condition  would  last.  The  chain  stores  would 
begin  to  acquire  or  build  factories,  and  the  manufacturers, 
in  spite  of  themselves,  be  driven  to  establish  chain  stores, 
either  as  individuals  or  in  combination. 

Manufacturers,  in  fact,  are  nearly  up  against  the  stark  logic 
of  the  situation:  the  battle  for  markets  is  going  to  be  fought 
out  in  the  retail  store,  and  the  competition  of  the  next  half- 
decade  is  going  to  be  not  so  much  between  individual  manu- 
facturers as  between  manufacturers  who  are  seeking  retail 
outlets,  and  the  retailers  who  are  growing  up  into  imperious 
competitors  with  retail  outlets  assured. 

It  is  therefore  apparent  that  the  specialty  manufacturers, 
in  the  grocery  line  at  least,  must  sooner  or  later  combine  in 
some  closer  and  more  effective  w^ay  than  they  have  done  or 
even  contemplated.  Harmonious  relations  with  the  jobbers, 
are  important,  but  it  looks  as  if  there  would  be  more  important 
questions  before  many  days.  The  new  development  would 
threaten  the  wholesalers  even  more  than  it  would  the  manu- 
facturer. It  would  probably  drive  the  two  together  for  the 
time  being. 

It  is  probable  that  the  first  effect  on  the  part  of  the  manufac- 
turers to  withstand  the  competition  of  the  big  chain  systems 
would  be  to  support  the  independent  stores,  and  the  co-operative 
chains  that  are  certain  to  spring  up,  but  that  this  would  ulti- 
mately give  way  to  something  more  like  control.  That  is 
the  only  thing  that  would  meet  the  centralized,  systematized 
competition  of  the  retail  chain.  Would  it  be  done  first  by 
small  manufacturers'  chains  competing  among  themselves, 
and  then  afterward  combining,  as  the  retail  chains  are 
doing.'' 

Or  would  the  manufacturers  already  organized  in  various 
organizations  pursue  some  more  conscious  course,  and  antici- 
pate the  crisis  by  preparing  for  it.''     .     .     . 


The  mail-order  business,  as  another  form  of  large-scale  retail- 
ing, deserves  more  attention  than  can  be  given  to  it  here. 


196        ADVERTISING  AS  A  BUSINESS  FORCE 

It  is  true  that  the  mail-order  houses  which  have  been  most 
successful  have  advertised  but  little  through  the  ordinary 
channels.    But,  if  we  include  their  catalogues  and  other  direct 

TJ   M  'Ir  advertising  by  mail  to  their  possible  customers,   we 
Order     realize  that  their  business  is  almost  wholly  built  up 

Business  ^^  advertising.  For  a  time  the  growth  of  the  mail- 
order business  was  so  rapid  as  to  cause  alarm  to  the  jobber 
and  the  small  wholesaler,  but  of  recent  years,  while  the  growth 
has  continued  in  the  case  of  a  few  of  the  better  organized  mail- 
order houses,  the  great  flock  of  less  well -organized  institutions, 
which  threatened  to  take  over  a  great  part  of  that  portion  of 
the  retail  business  of  the  country  which  could  be  done  by  mail, 
have  become  less  conspicuous.  It  now  seems  probable  that 
while  the  few  big  houses  will  grow  normally  and  perhaps  even 
phenomenally,  the  mail-order  business  has  distinct  limita- 
tions which  will  prevent  this  type  of  retailing  from  cutting 
much  more  heavily,  than  it  already  has  done,  into  the  retail 
business  of  the  country  as  a  whole. 

A  Chicago  correspondent,  writing  to  the  New  York  Journal 
of  Commerce  on  July  25,  1912,  gave  an  interesting  summary 
of  some  of  the  commercial  aspects  of  the  mail-order  house, 
although  he  brought  out  only  a  very  few  of  the  points  at 
which  the  mail-order  business  touches  advertising.  This  corre- 
spondent brings  out  the  fact  that  while  there  are  some  300,000 
country  stores  in  the  United  States  doing  a  business  of  nearly 
$3,000,000,000,  the  largest  of  the  mail-order  houses  has  an 
annual  business  of  approximately  $80,000,000.  So  that  while 
these  houses  may  be  large  in  the  absolute,  they  are  relatively 
not  as  important  as  the  volume  of  business  of  a  few  of  them 
has  led  many  to  believe  them  to  be. 

One  of  the  most  important  effects  of  the  development  of  the 
mail-order  house  is  the  fact  that  their  success  has  driven 
department  stores  and  even  wholesalers  not  only  to  do  a 
larger  mail  business  but  to  conduct  their  mail  business  much 
more  satisfactorily  than  they  ever  did  conduct  it  before. 


NEW  TYPES  OF  RETAILER  197 

ADVERTISING  ASPECTS   OF   CO-OPERATIVE   ENTERPRISES 

Co-operation  between  the  successive  steps  in  the  distribution 
system  is  of  very  recent  origin  in  this  country,  although  it  has 

Various    ^^^^  successfully  employe'd  in  England  and  on  the 

Types  of  Continent  for  a  number  of  years.  It  has  assumed 
o-opera  ^o^y^j-ious  fomis  in  this  country,  some  of  the  co-opera- 
tive enterprises  being  between  one  set  of  selling  factors, 
while  other  forms  attempt  to  unite  entirely  different  factors. 

One  of  the  largest  and  most  noteworthy  of  these  undertakings 
is  the  United  Drug  Company,  which  has  as  its  main  character- 
istic the  ownership  of  a  large  part  of  the  stock  of  the  manu- 
facturing company  by  the  retailers,  who  serve  as  the  outlet 
for  the  plant's  products. 


*Impressed  with  a  co-operative  movement  which  in  1903 
embraced  less  than  forty  dealers,  but  now  includes  close  to 
5,000  retailers,  Printers'  Ink  asked  William  C.  Neilly,  Adver- 
tising Manager  of  the  United  Drug  Company,  of  Boston,  Mass., 
to  relate  what  were,  to  his  mind,  the  more  important  details 
in  connection  with  the  development  of  his  firm's  system  of 
marketing  its  goods. 

His  recital  of  the  facts  goes  to  show  how  business  practice 
in  any  given  line  of  trade  may  be  revolutionized  when  once 
consumers  learn  the  inwardness  of  unjust  practices  of  which  mis- 
leading advertising  is  the  outward  sign. 

"The  heyday  of  patent  medicine  advertising,"  said  Mr. 
Neilly,  "was  in  1903.  The  space  used  was  extravagant,  and 
colossal  were  the  claims  which  practically  proposed  to  take 
dead  bodies  and  put  life  into  them! 

"There  was  no  check  on  the  word  'cure.'  Every  preparation 
was  heralded  as  a  'cure.'  The  people  paid  their  money  and 
frequently  got  nothing  or  worse  than  nothing. 

"The  demand  for  advertised  nostrums  was  enormous. 
Druggists  had  no  choice.  They  were  forced  to  stock  them  and 
to  sell  them,  or  lose  a  big  part  of  their  business.  It  was  a 
riot  of  fake  advertising,  but  it  carried  the  germ  of  opportunity. 
Keen  eyes  and  ears  perceived  the  inevitable  reaction  and  the 

*Pnnters"Ink,  March  21,  1912,  p.  86. 


198        ADVERTISING  AS  A  BUSINESS  FORCE 

opening  for  a  big  business  which  might  be  built  up  by  square 
deahng. 

"Soon  the  tide  turned;  resentment  against  nostrums  set 
in  so  quickly  and  grew  so  rapidly  that  some  manufacturers 
were  forced  into  exceedingly  critical  positions. 

"The  United  Drug  Company's  policy  matured  at  this  juncture. 
The  projectors  realized  the  great  demand  for  prepared  medi- 
cines, but  it  also  recognized  danger  in  the  fact  that 
The  United  standard  preparations  might  be  confused  in  the 
Company  n^i^ids  of  the  public  with  the  tottering  'patent' 
medicines.  The  two  classes  were  similar  in  their 
appeal  to  a  large  and  legitimate  field,  but  very  dissimilar  in 
intent,  purpose,  and  effect. 

"The  word  'patent'  implied  secrecy  and  the  buyer  knew 
little  or  nothing  concerning  ingredients.  The  purchaser  ex- 
pected to  buy  on  faith,  was  not  expected  to  ask  questions. 

"The  first  plank  in  our  platform  was  'no  secrets.' 

"From  the  start  the  composition  of  our  preparations  was 
made  an  open  book.  The  published  formulary  tells  every 
ingredient.  The  text  is  in  plain  English  and  big  type,  so  that 
the  layman  can  know  exactly  what  he  is  putting  into  his  system. 
Step  into  one  of  our  stores  and  ask  the  druggist  what  any  Rexall 
preparation  contains.     He  will  hand  you  the  printed  formulary. 

"The  United  Drug  Company  was  one  of  the  few  concerns 
which  did  not  have  to  revolutionize  its  formulas  and  its  litera- 
ture when  the  Pure  Food  and  Drugs  Act  went  into  effect.  Once 
an  edition  of  several  hundred  thousand  booklets  was  destroyed 
because  a  preparation  had  been  advertised  by  the  phrase 
'Prevents  colds.'  One  of  our  physicians  caught  this  phrase 
and  blue  penciled  it.  The  edition  was  burned  up  and  a  new 
one  run  off  with  the  statement,  'tends  to  relieve  colds.' 

"Painstaking  in  regard  to  our  preparations  became  a  real 
asset  to  us.     It  impressed  customers  and  led  to  popularity. 

"The  corporation  of  druggists,  however,  was  required  for 
our  success.  Something  was  needed  to  enlist  the  dealer's  vital 
interest. 

"To  attain  this  vital  interest  and  secure  the  successful 
carrying  out  of  our  plan,  Louis  K.  Liggett,  President  of  the 
United  Drug  Company,  organized  the  campaign  along  lines 
which  have  been  continued  to  the  present  day. 

"He  insisted  upon  the  idea  of  confining  the  sale  of  our  product 
to  one  druggist  in  a  community.     In  each  town  we  selected  a 


NEW  TYPES  OF  RETAILER  199 

reliable  druggist  and  outlined  the  possibilities  for  a  give-the- 
[)ublic-a-square-deal  drug  store  in  his  section  and  told  him 
what  we  hoped  to  accomplish  through  his  co-operation.  As 
a  further  inducement  and  to  secure  his  permanent  interest  we 
offered  him  a  stock  interest  in  our  company  and  a  participation 
in  its  profits.  At  our  first  meeting  forty  druggists  subscribed 
to  the  proposition. 

"The  features  chiefly  responsible  for  our  success  were  the 
then  radical  policy  of  non-secret  prescriptions  in  place  of  the 
frequently  bogus  patent  nostrums. 

"Next  in  importance  was  the  feature  of  having  one  exclusive 
druggist  in  a  community.  He  could  stand  behind  the  goods 
with  his  own  reputation.  He  could  recommend  them  as  the 
product  of  a  company  and  one  which  he  personally  backed  up 
with  a  money  investment.  He  could  guarantee  our  products 
to  customers  as  we  guaranteed  them  to  him,  and  print  on 
every  label  this  guarantee: 

The  United  Drug  Company  and  the  Rexall  Stores  selling  this  preparation 
guarantee  it  to  give  satisfaction;  if  it  does  not.  go  back  to  the  store  where  you 
bought  it  and  get  your  money.     It  belongs  to  you  and  we  want  you  to  have  it. 

"The  confidence  of  the  druggist  was  further  strengthened 
by  an  agreement  we  made  to  close  his  agency  and  repurchase  his 
stock  at  par  value  with  interest  any  time  our  dealings  were 
not  satisfactory  to  him  or  his  with  us.  If  we  should  have 
good  reason  to  retire  a  diiiggist  from  our  organization,  we 
could  not  act  arbitrarily  in  the  matter.  Each  state  has  a 
grievance  committee  composed  of  fifteen  of  our  dealers.  If  we 
wanted  a  druggist  to  withdraw  we  would  present  our  case 
to  a  committee  which  would  hear  both  sides  before  acting. 
Cases  like  this  are  rare.  Not  a  ca^e  was  submitted  last  year. 
"The  self-government  of  our  organization  might  be  further 
illustrated.  Our  officers  and  directors  are  elected  by  the  retail 
druggists  and  may  be  deposed  at  any  time  the  stockholders 
shall  elect  to  do  so. 

"  We  have  no  quantity  discounts.     Under  this  policy  drug- 
gists are  not  tempted  to  overstock  on  our   goods. 
The  Selling  ii  insures  frequent    turnovers   and   freshness   of  the 
tke  United  preparation  —  a  most  important  feature  in  our  class 
Drug  Co.  oi  merchandise. 

"  The  druggist  gets  behind  the  goods  with  spirit  and 
determination,   and    the    sales   increase  not  only  the  profits 


200        ADVERTISING  AS  A  BUSINESS  FORCE 

of  his  store  but  the  dividends  on  his  investment.  From 
this  simple  plan  has  sprung  a  spirit  of  co-operation  greater 
than  we  hoped  for  at  the  start.  The  5.000  dealers  are  not 
competitors  in  any  sense,  consequently  they  feel  free  to  tell 
everything  in  an  annual  stocldiolders'  convention.  They  dis- 
cuss, among  special  sales  features,  window  displays,  newspaper 
and  booklet  advertising,  and  all  that  makes  for  a  better  busi- 
ness. They  go  over  the  questions  of  handling  of  clerks,  giving 
of  special  commissions,  store  arrangement,  store  fixtures.    .    .    . 

"  We  advertise  prominently  about  ten  products.  The  factory 
charges  my  department  with  them.  The  sales  department 
adds  its  expenses.  The  general  overhead  for  executive, 
administration,  and  accounting  is  charged  to  me.  On  top  of 
all,  I  add  my  advertising  expenses.  It  is  up  to  me  to  sell 
this  product  and  make  the  sales  and  profits  cover  all  costs  and 
expense,  and  leave  something  for  dividends.  There  is  no 
shifting  of  responsibility.  Whatever  does  not  go  right  with 
the  ten  advertised  products  becomes  my  fault  and  mine  alone. 
The  advertising  manager  is  in  full  charge  and  control  of  the 
annual  appropriation.     Last  year  this  amounted  to  $600,000. 

"We  keep  close  tabs   on  every  community   and    increase 

or   decrease    our   advertising   in   each    in   proportion    to  the 

Eow  the    results.     A  record  is  kept  of  each  town.    It  is  charged 

United  with  the  cost  of  the  goods  shipped  there  and  shows 
Drug.  Co.  the  profit  involved.  A  substantial  portion  of  the 
Advertises  profit,  usually  all  of  it,  in  the  first  year,  is  applied 
for  promoting  sales  in  each  community. 

"Although  our  appropriation  is  planned  a  year  in  advance, 
it  is  revised  every  three  months  in  harmony  with  the  business 
done  in  each  town  and  increased  or  decreased  as  each  case 
may  require.  Our  first  year  in  any  new  field  is  a  gamble.  The 
first  advertising  campaign  is  gauged  by  our  experience  in 
similar  towns  in  the  same  state,  and  usually  our  estimate  is 
close.  The  ten  products  are  now  being  advertised  in  about 
3,700  newspapers. 

"Beyond  the  ten  advertised  products,  we  have  a  large  list 
of  so-called  'tailers,'  and  special  merchandise  to  take  advantage 
of  the  business  created  by  the  advertised  articles.  Usually 
our  advertising  in  national  mediums  is  confined  to  a  single 
product  over  a  comparatively  long  time.  Just  now  hair  tonic 
is  the  thing  hammered  in  the  big  weeklies  and  magazines. 

"The  wisdom  of  the  unique  features  of  our  plan  has  been 


NEW  TYPES  OF  RETAILER  201 

demonstrated,  I  think,  and  is  a  strong  illustration  of  what 
the  co-operative  principles  can  achieve." 

Another  form  of  co-operation,  which  is  found  in  various  parts 
Co-operative^^  the  country,  is  that  in  which  the  retail  concerns 

Retail  have  joint  control  over  the  wholesale  house.  This  is 
Wholesale  illustrated  by  the  enterprise  which  was  launched  at 

House  the  National  Retail  Grocers'  Association  in  Oklahoma 
City,  Okla.,  in  the  early  part  of  1912. 

*One  of  the  most  significant  signs  of  the  changing  trade 
conditions  is  found  in  the  action  of  the  National  Retail  Grocers' 
Association  at  its  convention  last  week  in  Oklahoma  City,  Okla., 
in  endorsing  co-operative  wholesale  grocery  houses  run  by  retailers, 
and  asking  that  manufacturers  and  jobbers  favor  them  by 
putting  them  on  the  jobbing  list. 

The  action  derives  a  large  part  of  its  importance  from  the 
fact  that  it  came  on  the  heels  of  a  lively  report  on  the  matter 
by  the  chairman  of  the  trades  relation  committee,  C.  E. 
Beinert,  who  is  also  president  of  the  Nebraska  Federation  of 
Retailers. 

Mr.  Beinert  openly  charged  unfairness  in  trade,  due  to 
selling  merchandise  on  the  quantity  price  basis,  and  advocated 
that  the  national  association  and  the  various  state  associations 
become  co-operated  buying  exchanges  for  their  members.  He 
argued  that  this  would  solve  the  problem  of  unfair  buying 
conditions  and  at  the  same  time  would  go  far  to  solve  and  elimi- 
nate unnecessary  expenses  between  producer  and  consumer. 

The  same  subject  came  up  frequently  in  the  reports  of  the 
presidents  of  the  different  state  associations. 

A  good  deal  of  Mr.  Beinert 's  report  is  worth  quoting.  It  is 
of  interest  to  manufacturers  even  outside  of  the  grocery  line, 
because  it  represents  the  way  retailers  look  at  some  of  these 
problems,  and  there  is  heard  complaint  now  and  then  by 
manufacturers  that  it  is  difficult  to  understand  just  how  the 
retailer  views  these  matters  and  what  grounds  he  has  for  these 
views. 

It  appears  from  Mr.  Beinert's  report  and  the  convention's 
action  that  the  retailer  not  only  has  views  but  that  they  are 

*Pnnters   Ink,  May  2,  1912,  p.  70, 


202        ADVERTISING  AS  A  BUSINESS  FORCE 

strong  views,  and  that  he  is  going  to  insist  on  their  being  carried 
out,  with  the  manufacturer's  consent  if  possible,  but  if  not, 
then  anyway, 

Mr.  Beinert  says  in  part: 

I  don't  want  you  to  lose  sight  of  the  fact  that  mail-order  houses,  large 
department  stores,  and  chain  stores,  comprising  the  special  interests  in  the 
retail  trade,  sell  about  15  per  cent,  and  the  regular  retailers  about  85  per  cent, 
of  the  merchandise  sold.     Who  sells  the  quantity? 

Yet  there  are  many  manufacturers  who  give  the  mail-order  houses,  chain  and 
department  stores  the  quantity  prices  and  the  regular  retailers  the  long  prices 
making  their  profits  out  of  the  85  per  cent,  who  sell  the  quantity,  and  giving, 
it  to  the  15  per  cent,  who  do  not  sell  the  quantity,  to  kill  off  the  85  per 
cent.     A  simple  case  of  killing  the  goose  that  lays  the  golden  eggs. 

A  well-known  nationally  advertised  brand  of  oats  for  which  we  are  asked 
to  pay  96|  cents  per  dozen  is  advertised  by  mail-order  houses  at  3  for  25 
cents  or  35  cents  per  dozen. 

When  the  mail-order  house  receives  an  order  for  a  dozen,  they  put  in  eleven 
packages  of  the  advertised  brand  and  one  of  their  own  brand,  with  a  letter 
that  usually  reads: 

"We  have  taken  the  liberty  of  including  one  package  of  our  own  brand  of 
oats.  If  you  do  not  find  it  equally  good  or  better  than  the  advertised  brand 
it  costs  you  nothing.  If  you  do  find  it  equally  good,  or  better,  kindly  order  it 
the  next  time.  This  oats  we  can  sell  you  at  ninety  cents  per  dozen.  This, 
our  own  brand,  contains  twenty  ounces,  the  same  as  the  advertised  brand." 

It  is  put  up  by  the  mail-order  house  out  of  the  bulk  oats  sold  them  by  the 
same  company  that  sold  them  the  advertised  brand. 

There  is  only  one  argument  that  corporations  pay  any  serious  attention  to, 
and  that  is  to  show  them  where  you  can  increase  or  decrease  their  profits. 

We  propose  to  show  them,  by  the  assistance  of  the  jobbers,  that  their  profits 
are  made  out  of  the  regular  retailers,  and  they  will  materially  increase  them 
by  putting  all  retailers  on  the  same  basis. 

If  the  jobbers  refuse  to  assist  us  to  get  a  square  deal,  and  manufacturers 
vnW  not  see  the  expediency  of  giving  us  a  square  deal,  then  we  must  go  over  the 
heads  of  the  jobbers,  and  as  a  means  to  an  end  we  must  do  our  own  jobbing.  That 
this  can  be  done  we  have  demonstrated  to  our  own  satisfaction  in  Nebraska. 

We  took  up  with  a  small  cracker  baking  concern  that  promised  to  give  us 
a  square  deal.  We  made  them  one  of  the  largest  and  most  prosperous  cracker 
bakeries  in  the  country.  Nine  tenths  of  the  Nebraska  retailers  are  patronizing 
it  with  a  living  profit  as.sured  themselves. 

W^e  are  buying  salt  in  carlots  for  our  members  on  a  co-operative  basis,  securing 
for  them  the  very  lowest  market  prices,  in  addition  to  the  usual  quantity 
discounts.  On  top  of  that  the  federation  pays  them  a  special  discount  of 
$5  per  car,  and  there  is  enough  left  of  the  saving  resulting  from  this  co-operative 
buying  to  pay  the  expenses  of  handling  through  the  secretary's  office. 

\\e  have  made  contracts  this  year  for  the  cooperative  buying  of  broovis, 
wherein  our  federation  gets  5  per  cent,  and  the  members  get  back  10  per 
cent,  on  all  brooms  they  buy  through  the  federation.  If  our  estimates  are 
correct,  and  we  think  tiiey  are,  we  will  buy  25,000  dozen  brooms  for  our 
members.  At  an  average  price  of  $4  per  dozen  we  will  turn  back  to  our  mem- 
bers $10,000,  besides  making  $5,000  to  finance  our  organization. 


NEW  TYPES  OF  RETAILER  203 

We  are  now  preparing  to  make  similar  contracts  for  corsets,  blankets  and 
rubber  footwear.  The  prices  made  us  enable  us  to  compete  ivith  mail-order 
houses,  department,  and  chain  stores. 

We  are  going  slow  but  sure.  What  we  are  doing  in  Nebraska  can  be  done 
in  every  state  in  the  United  States,  and  these  different  states  should  get  their 
inspiration  from  this,  their  national  association. 

We  retailers  have  for  some  time  unjustly  carried  the  odium  of  responsibility 
for  the  high  cost  of  living.  There  is  no  doubt  in  my  mind  that  there  is  robbery 
between  the  producer  and  the  consumer,  but  the  retailer  is  absolutely  not 
guilty. 

Indirectly  we  retailers  are  to  blame  because  we  do  not  fight  for  our  rights, 
and  we  will  not  get  them  until  we  do.  We,  as  a  national  association,  must 
cease  being  an  au.xiliary  to  the  manufacturers'  and  jobbers'  associations. 
Co-operation  that  gives  everything  to  the  other  fellow  does  us  no  good.  Let 
us  stand  firmly  on  our  own  bottom  and  fight  for  our  just  due. 


OTHER  FORMS  OF  CO-OPERATION  AMONG  RETAILERS 

This  organization  goes  one  step  further  than  the  various 
buyer's  exchanges  or  associations  which  have  grown  popular 
in  the  grocery  trade  of  New  York,  Philadelphia,  and  other 
Eastern  cities.  In  these  associations  the  retailers  aim  to  com- 
bine their  buying  capacity  in  order  to  secure  jobbers'  rates. 
What  is  really  done  is  to  set  up  a  co-operative  organization 
which  virtually  serves  the  purpose  of  a  jobbing  house  for  them. 

Another  form  of  co-operation  is  that  illustrated  by  the  United 
Store  Association  which  designs  to  take  over  for  a  series  of 
retail  stores  in  various  lines  some  of  their  common  functions, 
performing  them  on  a  co-operative  basis,  and,  presumably, 
more  cheaply  and  more  satisfactorily  than  they  can  be  per- 
formed by  the  individual  stores. 

Still  another  form  of  co-operation,  which  already  has  been 
mentioned,  is  that  in  which  the  consumer  shares  in  the  profits  of 
the  retail  concerns,  gradually  extending  its  operations  backward 
from  the  retailer  through  successive  steps  of  distribution  or  even 
into  production.  This  form  of  co-operation,  which  is  so  well 
known  in  connection  with  various  European  enterprises  and 
particularly  with  enterprises  in  Great  Britain,  has  not  gone 
very  far  in  this  country.  It  is  in  this  field  that  we  may  look 
for  very  important  developments  within  a  comparatively  few 


204        ADVERTISING  AS  A  BUSINESS  FORCE 

years.  (See  Chapter  V  for  a  discussion  of  consumer  co-opera- 
tion.) 

The  chain  store,  the  mail-order  house,  and  the  co-operative 
enterprise  have  not  yet  shown  just  what  position  they  are  to 
occupy  in  the  retail  distribution  system  of  the  United  States. 
As  nearly  as  one  can  judge  from  present  conditions  and  methods 
it  seems  probable  that  all  three  have  only  begun  their  growth, 
and  it  seems  to  be  a  safe  forecast  that  at  least  the  chain  store 
and  some  forms  of  co-operative  enterprise  will  very  soon  become 
extremely  important  competitors  of  the  "regular"  retailing 
system. 

Present  national  advertising  methods  are  aimed  largely  at 
the  "regular"  system,  although  some  also  have  a  place  for  the 
department  store.  But  the  chain  store,  and  the  co-operative 
enterprise  call  for  new  advertising  methods.  There  are  few 
of  the  present  forms  of  appeal  to  the  consumer,  and  there  are 
few  of  the  advertising  methods  developed  for  appeal  to  the 
selling  organization  which  can  be  adapted  to  these  two  forms 
of  "new"  retailing.  If  they  become  a  dominant,  or  even  a 
very  large  part  of  the  distribution  system,  present-day  adver- 
tising will  need  an  almost  complete  making  over. 

REVIEW   QUESTIONS  —  CHAPTER   VII 

1.  How  many  department  stores  are  there  in  the  United 
States.'' 

2.  What  does  Mr.  Hotchkin  advance  as  an  argument  for 
entering  the  retail  trade  via  a  New  York  department  store.-* 

3.  How  can  a  department  store  develop  individuality.' 

4.  \Miat  are  the  main  features  of  the  United  Cigar  Stores 
organization? 

5.  Why  has  the  chain-store  idea  developed  so  slowly  in  the 
dry  goods  business.'' 

6.  What  are  some  of  the  main  types  of  co-operative  enterprise 
now  in  operation  in  this  country.'* 


NEW  TYPES  OF  RETAILER  205 

PROBLEM   QUESTIONS  —  CHAPTER   VII 

1.  Do  you  think  Mr.  Hotchkin's  arguments  in  favor  of  the 
department  store  as  a  means  of  entering  the  retail  trade  are 
as  sound  as  those  of  Mr.  Louis's  in  Chapter  VI  in  favor  of  en- 
tering via  the  country  retailer  .^^  Does  it  make  any  difference 
what  kind  of  goods  are  under  discussion. f* 

2.  Do  you  think  the  chain-store  form  of  organization  has 
enough  advantages  over  individual  retailers  to  grow  perma- 
nently at  their  expense.'' 

3.  If  in  twenty  years  one  half  of  the  drug  business  of  the 
country  should  fall  into  the  hands  of  six  chain-store  concerns 
how  would  it  affect  (1)  Retail  prices,  (2)  the  wholesale  drug 
business,  (3)  the  manufacturers  of  drugs,  (4)  the  remaining 
independent  retailers  ? 

4.  How  would  advertising  be  affected  by  a  similar  general 
spread  of  the  United  Drug  Company  form  of  co-operation. 


CHAPTER  VIII 

ADVERTISING    AND    THE    WHOLESALER 

IN  EVERY  important  line  of  trade  in  the  United  States  the 
work  of  the  wholesaler  (or  jobber)  is  undergoing  radical 
change.  The  two  main  causes  for  the  disturbed  conditions 
in  the  wholesaler's  field  are:  (1)  The  increased  number  of  large 
retailers  and  of  combinations  among  retailers  which  are  able  to 
perform  the  jobber's  functions  for  themselves;  (2)  the  increased 
amount  and  activity  of  appeal  by  producers  to  consumers. 
Department  stores,  chain  stores,  co-operative  buying  associa- 
tions and  all  sorts  of  other  enlargements  of  retail  operations 
which  make  it  possible  to  buy  in  large  quantities  are  constantly 
trying  to  make  their  purchases  from  producers.  This  means 
not  merely  a  great  reduction  in  the  volume  of  business  con- 
ducted through  the  wholesaler,  but  it  means  that  the  loss  is 
mainly  from  the  most  profitable  portion  of  the  wholesaler's 
trade.  This  direct  buying  frequently  is  referred  to  as  "elimi- 
nating the  jobber."  The  great  volume  of  this  direct  business 
has  made  it  appear  that  the  wholesaler's  elimination  is  feasible 
in  many  cases,  and  much  is  said  about  a  "jobberless  future." 
It  is  seldom  made  clear,  however,  that  while  there  is  a  handful  of 
small  retailers  left  there  will  be  work  for  wholesalers.  Further- 
more, those  who  deal  "direct,"  do  not  often  put  much  emphasis 
on  the  fact  that,  while  the  jobber  may  have  been  eliminated  in 
their  cases,  the  work  which  he  formerly  performed  —  storage, 
assembling,  financing,  etc. —  has  not  been  entirely  eliminated. 
Much  of  it  still  remains  and  merely  has  been  assumed  by  the 
two  remaining  parties  to  the  distributive  transaction  —  the 
producer  and  the  retailer.     Nor  do  the  direct  dealers  dwell  on 

20G 


ADVERTISING  AND  THE  WHOLESALER      207 

the  facts  that  the  savings  by  jobber  elimination  sometimes  are 
more  apparent  than  real,  and  that  such  savings  as  are  made 
seldom  pass  out  of  the  hands  of  those  whose  assumption  of  the 
jobber's  work  has  made  this  elimination  possible. 

The  appeals  to  the  ultimate  consumer  by  means  of  national 
advertising,  conducted  by  the  producer,  have  weakened  the 
jobber's  ability  to  control  the  character  of  his  trade.  And  thus 
the  jobber's  business  is  not  only  whittled  away  at  its  most 
profitable  end  by  direct  dealing,  but  such  as  is  left  for  him  is  also 
taken  out  of  his  control  to  a  greater  or  less  degree.  In  defence 
the  jobber  puts  his  best  selling  efforts  on  brands  or  trade-marks 
which  he  has  advertised  widely  on  his  own  account,  and  which 
can  be  made  to  bring  him  trade  which  he  can  control.  But 
in  exploiting  private  brands  the  jobber  becomes  a  competitor 
of  his  own  clients.  And  we  have  the  beginnings  of  the  chaos 
already  described.     (See  Chapter  II.) 

In  addition  to  these  two  main  causes  of  change  in  the  job- 
ber's work  there  are  many  others  which  apply  to  different  lines 
of  trade  with  particular  force.  For  instance,  in  the  case  of  the 
dry  goods  trade,  the  increased  amount  of  ready-to-wear  busi- 
ness is  materially  modifying  the  jobber's  work.  Ready  to- 
wear  goods  are  not  easily  jobbed  with  regular  drygoods  lines. 
A  "cutter-up"  —  or  maker  of  ready-to-wear  goods  —  cannot 
use  the  "regular"  drygoods  jobbing  trade  to  good  advantage, 
nor  does  the  "regular"  drygoods  jobbing  trade  care  to  load  up 
with  many  cutter-up  accounts.  One  after  another  of  the  large 
Western  drygoods  jobbers  has  gone  into  this  branch  of  manu- 
facturing for  himself,  seeking  better  control  over  his  lines,  as 
well  as  the  accompanying  profits.  In  New  York  the  multiplica- 
tion of  cutting  establishments  —  taken  with  the  growth  of  large 
retailers  —  has  put  most  of  the  general  jobbers  out  of  business, 
and  has  created  a  host  of  "specialty"  jobbers  who  handle  a  few 
allied  lines,  many  of  them  being  ready-to-wear  lines. 

Again,  the  decreased  dependence  on  imported  fabrics  in  any 
except  the  most  expensive  lines  has  had  a  direct  effect  on  the 


208        ADVERTISING  AS  A  BUSINESS  FORCE 

drygoods  jobbing  business.  Forty  years  ago  the  dry  goods 
jobber  was  also,  to  a  large  extent,  a  drygoods  importer  and, 
consequently,  was  located  at  the  coast  with  the  entire  country 
as  his  market.  But  with  the  increased  percentage  of  drygoods 
business  represented  by  the  products  of  American  mills,  the 
national,  general  jobber  has  largely  disappeared  from  the 
East  while  there  has  grown  up  in  Chicago  and  St.  Louis  a  new 
type  of  large  manufacturing  jobber  serving  the  newer  sections 
of  the  country.  At  the  same  time  the  small,  local  jobber  has 
increased  in  importance.  Somewhat  similar  conditions  to 
these  which  are  found  in  the  drygoods  business  are  found  in 
other  trades.  In  short,  practically  every  line  of  business,  selling 
goods  to  be  finally  consumed  at  retail,  has  at  work  in  it  influ- 
ences making  necessary  a  reorganization  of  the  jobber's  service. 

In  almost  every  trade,  however,  the  two  influences  already 
referred  to  as  being  "  main  causes  "  are  found. 

These  changes  in  the  jobber's  work  have  brought  upon  him 
an  amount  of  ill-will  which  he  does  not  entirely  deserve.  He, 
of  all  the  features  of  the  distribution  system,  is  most  often 
called  upon  to  defend  his  existence.  This  result  of  the  chang- 
ing conditions  in  distribution  has  been  intensified  by  the  fact 
that  the  jobber  normally  has  no  good  way  of  defending  himself 
without  completely  breaking  with  his  old  patrons. 

The  work  of  the  jobber  in  the  modern  retail  distribution 
system  is  described  in  an  unsigned  article  in  Printers'  Ink,  which 
undertakes  to  divide  the  modern  retail  trade  into  classes,  and 
show  how  the  jobber,  or  other  type  of  middlemen,  serves  the 
different  classes  of  business.  This  article  shows  the  bearing 
upon  advertising  of  some  of  the  changes  which  are  in  progress 
in  the  work  of  the  modern  jobber,  and  the  bearing  of  advertis- 
ing in  turn  upon  them. 

*It  is  costing  more  to  sell  goods  every  day,  according  to  men 
prominent  in  the  retail  trade.     W.  R.  Hotchkin,  advertising  di- 


*Printers  Ink,  July  4,  1912,  p.  12. 


ADVERTISING  AND  THE  WHOLESALER       209 

rector  for  Gimbel  Brothers,  New  York,  says  that  the  average 

selUng    costs    in    department    stores    will    run    from    22|    to 

25    per    cent,    of    the    selling   price;  in   some   cases 

Modern    ^^iq   selling  cost  is  as   high  as  33^  per  cent.     Those 

Business    n  i  x  •      i    j  m.      rru  •        i  i 

Qi^gig  figures  do  not  niclude  a  pront.  1  ney  simply  represent 
the  cost  of  carrying  the  goods  in  stock,  the  advertis- 
ing and  the  clerk  hire  necessarj^  to  pass  them  on  to  the  cus- 
tomers, etc.  The  Dry  Goods  Economist  is  sponsor  for  the 
following  table,  which  shows  the  gross  profit  each  department 
head  in  a  large  Eastern  store  is  required  to  show,  the  percent- 
age in  every  case  being  figured  on  the  selling  price.  It  should 
be  noted,  however,  that  these  gross  profits  do  not  include  any 
discounts.  Each  department  head  is  obliged  to  secure  all  pos- 
sible discounts  from  bill  prices  in  addition  to  the  following 
profits : 

Blankets,  30%. 

Candy.  35%. 

Carpets  and  Rugs,  30%. 

China  and  Glassware,  35%. 

Corsets,  33^%. 

Dress  Goods,  28%. 

Fish  and  Meats,  18%. 

Fruits  and  Vegetables,  25%. 

Furniture  and  Bedding,  33f  %. 

Gloves,  28%. 

Groceries,  20%. 

Handkerchiefs,  30%. 

Hosiery  and  Knit  Underwear  (women's  and  children's),  30%. 

Housefurnishings,  331%. 

Infants'  Wear,  30%. 

Jewelry  and  Watches,  35%. 

Laces,  Embroideries,  etc.,  33§%. 

Leather  Goods,  30%. 

Linens,  WTiite  Goods,  etc.,  25%. 

Men's  Furnishings,  30%. 

Millinery,  33|%. 

Muslin  Underwear,  25%. 

Neckwear  and  Veilings,  33|%. 

Notions,  33|%. 

Perfumery  and  Druggists'  Sundries,  25%. 

Pictures,  35%. 

Ribbons,  27%. 

Sewing  Machines,  27%. 

Sheet  Music,  25%. 

Shoes,  27%. 

Stationery  and  Books,  33|%. 

Sporting  Goods,  27%. 

Toys,  331%. 


210        ADVERTISING  AS  A  BUSINESS  FORCE 

Trunks  and  Baby  Carriages,  33  j%. 

Umbrellas,  30%. 

Upholsteries,  33|%. 

Wash  Goods,  Flannels  and  Linings,  23%. 

Waists,  30%. 

When  it  is  considered  that  the  department  store  probably 
does  business  cheaper  than  the  average  small  retailer,  it  will  be 
evident  that  the  problem  of  securing  adequate  and  economical 
distribution  has  a  certain  relationship  to  selling  costs.  Those 
profits  are  practically  fixed  at  the  figures  given,  or  higher,  for  all 
goods  which  are  handled  through  retail  stores.  Add  to  them  a 
15  to  25  per  cent,  profit  for  the  jobber,  the  manufacturer's  sell- 
ing cost  and  the  manufacturer's  profit,  and  the  cost  of  production 
looks  pretty  small  as  compared  with  what  the  consumer  pays 
for  the  goods.  It  is  small  wonder  that  consumers  growl  about 
the  high  cost  of  living,  and  maintain  that  they  are  being  robbed. 

The  popular  interest  just  now  is  fixed  upon  prices,  probably  to 
a  greater  extent  than  ever  before,  and  the  manufacturer  who  can 
give  equal  quality  for  a  lower  price  or  better  quality  for  the 
same  price  enjoys  an  advantage  in  proportion  to  the  intensity  of 
the  popular  sentiment.  And  about  the  only  place  the  price  can 
be  profitbly  shaved  is  in  distribution  cost.  The  retailer  must 
have  his  profit,  the  manufacturer  must  have  his;  there  is 
little  chance  for  a  saving  there.  But  if  it  is  possible  to  get 
the  goods  into  the  hands  of  the  retailer  at  less  expense,  a  smaller 
price  to  the  consumer  will  suffice.  It  is  a  question  which  faces 
most  manufacturers  of  new  products :  how  to  get  the  most  effec- 
tive distribution  at  least  expense. 

It  is  not  possible,  nor  would  it  be  useful,  to  go  into  the  whole 
question  of  distribution  in  this  space.  There  are,  however,  cer- 
tain short  cuts  which  may  be  followed  with  special  kinds  of  goods. 

Generally  speaking  there  are  three  methods  of  distribution: 

(1)  Jobber,  (2)   direct  to  dealer,  and  (3)   direct  to  consumer. 

There  are  also  three  classes  of  goods:     (1)  new  prod- 

Three      ucts,  (2)  similar  goods  for  less  money,  and  (3)  better 
^D^^'f^b  "^  quality  or  larger  quantity  for  the  same  money. 
tion  The  new  product  usually  requires  demonstration. 

People  must  be  taught  what  it  is  and  what  it  will  do, 
and  that  demonstration  must  be  made  to  the  consumer.  The 
manufacturer  with  a  jobber  and  a  dealer  between  himself  and 
the  consumer  has  no  surety  that  his  goods  are  being  properly 
presented. 


ADVERTISING  AND  THE  WHOLESALER      211 

To  a  less  degree  it  is  the  same  condition  which  confronted  the 
makers  of  typewriters  when  the  machines  were  first  developed. 
Nobody  knew  what  a  typewriter  was,  definitely,  neither  did 
the  great  business  public  see  any  earthly  reason  why  it  should  use 
machinery  to  write  letters.  So  it  was  necessary  to  develop  a  force 
of  men  who  talked  typewriter  exclusively,  and  talked  to  the  man 
who  was  to  use  the  typewriter.  Jobbers  and  dealers  were  im- 
possible, from  the  very  nature  of  the  goods.  Thus  it  comes  about 
that  whereas  the  cost  to  manufacture  a  standard  typewriter  is 
somewhere  around  $20  (some  standard  machines  cost  as  low 
as  $18)  the  price  to  the  consumer  is  $100.  It  looks  as  though  it 
would  be  more  economical  to  let  the  stationery  jobbers  handle 
the  typewriter  business,  but  at  the  time  the  typewriter  was  put 
on  the  market  it  was  impossible  to  sell  it  that  way.  The  most 
economical  method  of  securing  distribution,  as  the  Irishman  says, 
was  the  most  expensive  in  that  case. 

There  are  a  lot  of  novelties  being  sidetracked  right  along  be- 
cause the  jobber-dealer  combination  does  not  sell  them  to  the 
consumer.  They  need  demonstration  which  the  jobber  with  his 
15  per  cent,  profit  and  the  dealer  with  his  33^  cannot  afford  to 
give  them.  Hence  when  the  consumers  are  sent  by  the  manu- 
factuer's  advertising  to  their  dealers  they  are  unable  to  "find 
out"  about  the  goods,  and  a  good  many  sales  are  not  made. 

The  department  stores  throughout  the  country  are  furnishing 

a  means  of  distribution  of  these  goods  which  need  demonstrating, 

because  of  their  power  to  buy  at  first  hand  and  to 

Direct     combine  the  jobber's  profit  and  the  dealer's.     There 

Depart-  ^^^  ^^°"*  ^'^^^  ^^°^^^  ^^  *^^  United  States  which 
ment  Stores  regularly  buy  most  of  the  manufactured  lines  they 
carry  in  this  way,  and  some  manufacturers  have  ex- 
tended the  system  a  good  deal  further  than  that.  The  depart- 
ment store  which  buys  goods  at,  say,  60  per  cent,  discount, 
can  afford  to  assign  a  saleswoman  to .  demonstrate  the  goods  to 
the  exclusion  of  everything  else.  A  list  of  a  thousand  depart- 
ment stores  will  cover  the  country  pretty  thoroughly,  and  will 
get  the  goods  pretty  well  known. 

This  department-store  system  of  direct  buying,  particularly 
in  the  textile  field,  is  getting  so  common  that  there  is  a  well- 
developed  tendency  on  the  part  of  jobbers  to  cover  themselves. 
For  example,  Marshall  Field  &  Company,  besides  their  one 
big  retail  outlet,  are  leasing  factories  and  preparing  for  the  out- 
put of  brands  which  they  can  control.     The  H.  B.  Claflin  Com- 


212        ADVERTISING  AS  A  BUSINESS  FORCE 

pany,  on  the  other  hand,  is  rapidly  adding  new  retail  outlets,  by 
purchasing  control  of  leading  stores  wherever  possible.  Of 
course  this  merely  intensifies  the  situation  and  makes  it  more 
than  ever  imperative  for  the  independent  manufacturer  to  sell 
his  goods  first  of  all  to  the  consumer  by  advertising  and  demon- 
strations. 

Indeed,  as  S.  R.  Latshaw,  manager  of  the  textile  department 
of  the  Curtis  Publishing  Company,  recently  said  before  the  con- 
vention of  knit  goods  manufacturers,  "There  is  only  one  change- 
less factor  —  the  ultimate  consumer." 

Of  course  it  means  more  work  —  and  in  the  beginning  more 
expense  —  to  sell  a  thousand  department  stores  instead  of  a 
dozen  or  fifteen  jobbers;  that  is,  provided  the  jobbers  will 
handle  the  goods  at  all.  But  it  is  a  question  of  reaching  the 
consumer,  and  nothing  short  of  that  will  serve. 

Sometimes  it  is  possible  to  stir  up  the  jobbers  to  take 
an  interest  in  the   product   by    starting    something    with    a 

Usinq     ^^^  dealers  in  each  territory  —  making  it  appear  that 

Direct     the  business  is  going  direct  to  the  retailer,  and  show- 

Sale  to     ing  the  jobber  that  the  retailer  will  buy  the  goods. 
^^^j  h}F  ^^^  retailer  in  a  small  city  in  northern  New  York 

"  ^"  unwittingly  showed  a  manufacturer  of  novelties  how 
to  work  it.  This  particular  manufacturer  had  been  to  a  Syra- 
cuse jobber  with  a  "catnip  ball"  —  a  wooden  ball  loaded  with 
catnip  for  pussy's  edification  —  and  the  jobber  had  turned  the 
proposition  down  cold.  A  retail  druggist  in  another  city  —  a 
friend  of  the  manufacturer  —  heard  the  story,  and  persuaded 
the  manufacturer  to  sell  him  several  gross  of  the  balls  at  the 
jobber's  price.  For  five  days  he  bombarded  the  people  with 
teasing  newspaper  ads  about  cats,  and  finally  came  out  with  an 
offer  of  a  catnip  ball  for  ten  cents.  Nobody  else  in  town  had 
any,  and  the  hurry  calls  upon  the  Syracuse  jobber  met  with 
a  somewhat  surprised,  "Sorry,  but  we  don't  carry  them."  The 
jobber  stocked  catnip  balls,  though;  he  could  hardly  refuse  when 
every  dealer  in  town  was  inquiring  about  them. 

Somewhat  similar  in  effect  is  the  system  followed  by  the 
maker  of  a  toilet  preparation.  Quarter-page  ads  in  the  drug 
papers  offered  one  full-size  package,  retail  price  a  dollar,  free  to 
every  dealer  who  would  fill  out  the  coupon  with  his  name  and 
address.  "For  further  supplies  go  to  your  jobber,"  the  ad 
read.  There  were  no  strings  to  the  offer,  and  no  conditions 
which  any  dealer  would  not  be  perfectly  willing  to  comply  with. 


ADVERTISING  AND  THE  WHOLESALER       213 

Simply  the  name  and  address  was  necessary  on  the  coupon,  but 
those  names  and  addresses  could  be  used  on  the  jobber  with 
telling  effect. 

One  of  the  objects  of  these  plans  to  stir  up  dealer  and  con- 
sumer demand  ahead  of  the  jobber  is  to  impress  it  upon  the 
jobber's  mind  that  these  are  the  manufacturer's  customers, 
not  wholly  his  own.  That  has  been  one  of  the  difficulties 
with  jobber  distribution  which  manufacturers  have  had  to 
contend  with  —  that  the  jobber  controlled  the  trade  of  his 
territory,  and  could  swing  the  greater  part  of  it  to  some  other 
brand  unless  the  consumer  advertising  was  simply  irresistible. 
In  that  case  he  would  lie  down  on  the  job  and  sell  the  goods 
only  when  the  dealer  demanded  them.  But  when  the  jobber 
sees  the  demand  being  created  in  his  own  territory,  so  that 
he  is  constrained  to  come  and  ask  for  the  line  instead  of  having 
it  offered  to  him  on  a  silver  platter,  it  makes  a  difference. 

But  all  of  these  plans  —  and  I  might  include  several  more, 
such  as  renting  dealers'  windows  on  the  principal  streets  and 
giving  demonstrations  of  the  goods  therein,  hiring  college 
students  during  vacation  time  to  visit  housewives  and  demon- 
strate cooking  utensils,  etc.  —  these  plans  are  only  for  the 
start  of  the  campaign.  With  the  great  majority  of  articles 
it  is  not  possible  to  get  along  permanently  without  the  jobber. 

It  sometimes  looks  like  a  good  thing  for  a  manufacturer 
to  tie  up  by  contract  with  a  large  mail-order  house  or  two 
or  three  department  stores.  All  his  output  is  contracted  for, 
and  he  doesn't  have  to  worry  about  distribution  or  credits.  He 
is  sure  of  his  money,  and  sure  of  a  profit  at  the  end  of  the  year. 

It  looks  good,  but  it  isn't,  because  the  manufacturer  is 
competing  with  others  on  a  basis  of  manufacturing  cost  alone. 
The  moment  somebody  else  can  make  the  goods  cheaper  than 
he  can,  he  loses  the  business  —  and  is  left  with  no  selling 
organization  and  no  reputation.  It  is  necessary  to  begin  all 
over  again. 

And  another  reason  why  the  manufacturer  needs  the  jobber 

is  this :  he  doesn't  know  who  his  customers  really  are.     He  may 

think  he  will  go  direct  to  the  retailers,  but  beyond  a 

Why  the    certain  point  that  isn't  practicable,  because  it  costs 

turerNeeds^^^  much  to  make  small  sales   in  widely  scattered 

the  Jobber  territory,  and  there  are  a  lot  of  dealers  who  could 

carry  the  goods  whom  a  manufacturer  would  never 

find   if  left  to   himself.     For  example,   the   Ingersoll  Dollar 


214        ADVERTISING  AS  A  BUSINESS  FORCE 

Watch  is  sold  by  more  than  61,000  dealers.  Most  of  them 
would  probably  be  characterized  off  hand  as  "retail  jewel- 
ers," yet  no  list  of  jewelers  would  contain  anything  like 
all  of  them  a  list  of  those  who  handle  jewelry  —  of  possible 
customers  of  a  new  manufacturer  in  the  jewelry  line  —  would 
include  auto  supply  dealers,  piano  dealers,  dealers  in  sewing- 
machine  supplies,  photographic  goods,  drygoods,  groceries, 
furniture,  plantation  supplies,  harness,  soft  drinks,  meals, 
books,  cigars,  bicycles,  stoves,  picture-frames,  window  glass, 
and  men's  clothing.  Without  the  jobber's  salesman,  who 
is  familiar  with  a  certain  territory,  it  is  almost  impossible  for 
a  manufacturer  of  goods  in  common  use  to  get  anything  like 
the  maximum  distribution  for  his  product.  He  doesn't  know 
who  the  dealers  are,  and  it  costs  too  much  to  find  out.  The 
15  per  cent,  profit  paid  to  the  jobber  will  be  much  less  than 
would  be  required  to  reach  all  those  dealers  direct. 

But  throughout  the  campaign  it  should  be  borne  in  mind 
that  the  consumer  is  in  reality  the  only  staple  element,  the  only 
factor  which  may  not  change  overnight.  The  jobber  may 
conclude  to  push  his  own  private  brand  among  his  trade; 
dealers  may  switch  for  goods  on  which  there  is  a  larger  profit, 
but  the  consumer's  preference,  once  determined,  will  go  a  long 
way  toward  preventing  those  very  things. 

A  grocery  jobber's  defence  of  the  work  which  the  wholesaler 
in  his  trade  is  performing  is  found  in  an  address  delivered  by 
^        Arthur  M.  Wilson,  President  of  the  New  England 
Wholesale    Wholesale  Grocers'  Association,  before  a  gathering 
Defence    ^^   wholesale    grocers   in   Harrisburg,    Pa.,  in  June 
of  His     1912,  as  it  was  reported  in  the  New  York  Journal 
usmess  ^j-     Commerce.      Mr.   Wilson  raises    the    interesting 
question  as   to  who  is    the  middleman  and  who   is  the  pro- 
ducer under  the  present  conditions  of  disorganization. 

*Not  long  ago  one  of  the  most  prominent  manufacturers 
of  proprietary  goods  came  to  me  and  said:     "We  have  got 

*Part  of  an  address  delivered  by  Arthur  M.  Wilson,  President  of  the  New 
England  Wholesale  Grocers'  Association  before  a  gathering  of  wholesale 
grocers  in  Harrisburg,  Fa.,  in  June,  1912.  Reported  by  the  New  York  Journal 
of  Commerce  —  Printers'  Ink,  June  20,  1912,  p.  70. 


ADVERTISING  AND  THE  WHOLESALER       215 

to  do  something  to  get  our  goods  into  a  certain  large  retail 
store.  He  is  a  large  distributor  and  we  must  have  a  part  of 
his  business.  He  will  not  buy  through  the  jobber;  I  have 
tried  to  sell  him  and  he  says  he  will  give  me  an  order  if  I  will 
ship  direct." 

I  asked  him  to  wait  a  moment,  and  I  called  for  a  slip  from 
the  bookkeeper  and  showed  the  manufacturer's  agent  where 
we  had  sold  this  same  retailer,  two  days  before,  over  $200  worth 
of  his  goods;  also  showed  him  that  he  was  buying  right  along. 
"Now,"  I  asked,  "can  you  show  me  how  you  can  increase  your 
output  by  selling  him  direct .^^  You  have  sold  and  are  selling, 
me  and  the  other  jobbers  and  we  are  giving  you  a  good  business. 
Do  you  believe  w^e  will  be  as  interested  in  your  product  if  you 
step  in  and  take  away  from  us  some  of  our  best  trade.^"  He, 
of  course,  was  obliged  to  admit  that  it  was  better  to  do  as 
he  had  been  doing  and  depend  upon  the  jobber. 

But  the  real  trouble  comes  from  the  fact  that  many  agents 
would  never  have  come  to  us  and  asked  the  question,  but 
would  have  looked  at  the  order  as  so  much  gained  to-day; 
would  have  shipped  the  goods,  leaving  it  for  us  to  find  out 
afterward.     .     .     . 

Another  thing,  if  quantity  is  the  object  and  the  manufacturer 

thinks  it  is  right  for  several  retailers,  or  a  chain  of  stores,  to 

combine  and  buy,  say,  a  carload  —  generally  less  — 

The  Jobber  T^l^y  should  not  the  jobbers  combine  and  buy,  say, 

OiiantUv    ^^^  ^^  twenty  carloads,  and  ask  Mr.  Manufacturer 

Price     for  an  extra  10  or  15  per  cent..?^     The  manufacturer 

does  not  want  this,  for  he  knows  it  is  not  for  his  best 

interest. 

Now,  if  the  manufacturer  wants  the  jobber  to  distribute 
his  products  —  and  nearly  all  say  they  do  —  then  let  them 
play  fair.  Don't  let  "thief"  be  Ijranded  on  his  forehead  be- 
cause he  tries  to  steal  10  per  cent,  of  the  jobber's  trade.  Not 
only  that,  but  let  him  remember  that  the  large  stores  and 
the  chain  of  stores  are  not,  as  a  rule,  his  best  distributors; 
that  the  small  retailer,  with  the  small  capital,  works  just  as 
hard  to  distribute  a  package  of  his  goods  as  his  larger  competi- 
tor's and  is  entitled  to  just  as  much  pay  per  package. 

It  has  been  said  that  the  middleman  must  go.  Who  is  the 
middleman?  We  all  agree  the  jobber  is  a  necessity  to  gather 
together  commodities  from  all  points  of  the  world,  obtain 
them  in  their  various  seasons  and  hold  them  until  such  time 


216        ADVERTISING  AS   A  BUSINESS  FORCE 

as  the  retailer  wants  them  for  his  customers,  the  consumers. 
The  jobber's  business  is  not  so  arranged  that  he  can  sell  the 
consumer. 

The  retailer  is  certainly  a  necessity,  for  the  average  family 
could  not  live  over  twenty-four  hours  if  the  retailers  were  all 
to  close  their  doors.  Next  come  the  manufacturer's  agents. 
Are  they  the  middlemen.?  I  think  they  would  show  to  you 
forcibly  they  are  very  much  of  a  necessity.  Then  it  would 
be  the  manufacturers;  but  how  could  we  have  the  many  articles 
which  now  seem  absolutely  necessary  for  our  tables  if  we  were 
to  push  them  out? 

There  are  very  few  manufacturers  in  this  country  who  make 

a   business  of   distributing  all  of  their  products  direct  to  the 

retailer.     There  are  but  few  who  can  do  so  for  the 

fn-i  one  reason  that  it   is  too  expensive.     They  realize 

Selling  ^^^^  with  the  capital  invested  for  the  difference 
between  the  price  to  jobber  and  the  price  to  retailer 
it  would  be  impossible  to  handle  their  products.  The  jobber, 
as  a  rule,  discounts  his  bills  and  the  manufacturer  gets  his 
money  back  quickly  to  buy  more  raw  material.  The  jobber 
also  furnishes  free  storage  and  drayage,  so  that  the  manufac- 
turer's product  is  well  distributed  all  over  the  country,  available 
on  a  moment's  notice  to  supply  the  retail  trade.  If  the  manu- 
facturer should  attempt  to  furnish  the  retail  trade  direct  he 
would  not  only  have  a  large  number  of  small  accounts  to  look 
after,  which  would  in  itself  increase  his  office  force  a  hundred- 
fold, but  his  risk  of  loss  would  be  increased  many  times.  Fur- 
thermore, he  would  be  obliged  to  have  warehouse  charges 
in  every  city  in  the  country,  pay  drayage  and  also  be  under  the 
expense  of  having  men  in  each  place  to  look  after,  check  in, 
and  ship  his  goods. 

When  this  can  all  be  secured  for  10  per  cent.,  yet  would  cost 
the  manufacturer  doing  it  himself  15  per  cent.,  why  should 
he  not  say  "Mr.  Jobber,  I  want  you  to  do  this  work  for  me; 
I  will  pay  you  a  fair  price  and  will  not  interfere  with  your 
customers."  Some,  we  admit,  do  say  this  and  carry  out  their 
arrangement  faithfully;  others  say  it,  but  the  moment  we  are 
off  our  guard  and  they  have  an  opportunity  to  sell  a  large 
retailer  or  combination  of  retailers  whom  they  feel  will  pay 
their  bills  promptly  they  take  advantage  of  it  and  fall  back 
upon  the  old  cry  of  "quantity  order  —  we  must  have  dis- 
tribution —  we  could  not  afford  to  let  it  pass,  for  you  could 


ADVERTISING  AND  THE  WHOLESALER       217 

not  have  sold  them  and   they  would  have  had  some  other 
fellow's  goods." 

From  these  excerpts  in  defence  of  the  jobber  it  will  be 
seen  that  the  jobber  himself  has  become  tacitly  to  recognize 
that  he  is  on  the  defensive.  There  seems  to  be  no  denying 
the  fact  that,  if  the  jobber  were  still  conducting  his  trade  as 
it  was  conducted  thirty  years  ago,  the  problems  of  modern 
distribution  of  manufactured  merchandise  would  be  very  much 
simpler  than  they  are.  It  is  a  very  serious  question,  however, 
whether  the  old  methods,  if  they  were  followed  by  any  con- 
siderable portion  of  the  jobbing  trade  without  modification, 
would  make  it  possible  for  the  jobber  to  earn  a  living  profit. 

It  being  clearly  the  case  that  the  jobber  still  has  much 
work  to  do,  even  though  direct  purchasing  and  other  new 
methods  may  have  cut  off  some  of  his  trade,  the  jobber  contends 
that  he  is  justified  in  adopting  methods  of  conducting  his 
business  which  will  enable  him  to  avoid  the  necessity  of  carrying 
on  his  work  at  a  loss. 

These  methods  which  the  jobber  has  adopted  for  saving  his 
profits  from  annihilation  have  drawn  upon  him  bitter  attacks 
from  every  side.  The  three  defensive  methods  of  the  jobber 
which  we  wish  to  discuss  are:  (1),  the  undertaking  of  manufac- 
turing by  the  jobber  on  his  own  account;  (2),  the  develop- 
ment of  trade-marks  or  private  brands  which  the  jobber  owns 
and  puts  upon  goods  produced  for  him  by  others,  and,  (3), 
direct  appeal  to  the  consumer  in  competition  with  the  appeals 
being  made  to  the  consumer  by  the  manufacturer. 

"substitution"  by  the  jobber 

The  following  article  expresses  a  commonly  accepted  view 
of  the  commercial  effects  of  these  defensive  efforts  of  the 
jobber.  This  article  appears  anonymously,  the  author  being 
said  to  be  "The  Advertising  Manager  of  a  Well-known  Drug 
Specialty." 


218        ADVERTISING  AS  A  BUSINESS  FORCE 

*Tlie  writer  has  been  very  much  interested  in  the  articles 
now  running  in  Printers'  I?ik  regarding  the  past,  present  and 
future  of  the  middleman  —  the  jobber. 

The  first  article,  written  by  the  advertising  manager  of 
the  firm  of  Francis  H.  Leggett  &  Co.,  wholesale  grocers,  indi- 
cates pretty  clearly  how  valuable  the  jobber  might  be  if  he 
confined  his  activities  to  actual  jobbing  or  distributing.  In 
spite  of  the  fact  that  the  jobber  is  an  apparently  necessary 
factor  in  economical  merchandising,  it  is  a  matter  of  much 
concern  to  the  wholesale  trade  in  general  that  few  manufac- 
turers, particularly  of  advertised  trade-marked  goods,  now 
confine  their  sales  exclusively  to  the  jobber. 

In  the  drug  line,  for  example,  there  is  a  growing  tendency 
among  manufacturers  of  advertised  specialties  to  sell  the 
"cream  of  the  retail  trade"  direct.  The  largest  and  most 
influential  retail  druggists  buy  almost  everything  "direct" 
and  in  most  cases  get  the  manufacturer's  very  best  wholesale 
discounts.  As  this  policy  becomes  more  and  more  general, 
the  jobber's  field  is  being  restricted  more  and  more  to  the 
smaller  dealer  —  the  dealer  whose  capital  and  output  does 
not  make  it  possible  for  him  to  buy  the  quantities  necessary 
to  obtain  "wholesale  discounts." 

It  is  this  condition  of  affairs  which  is  giving  the  wholesale 

trade  the  most  worry,  and  it  is  this  condition  of  affairs  which  is 

responsible  for  the  general  reduction  in  profits  of  the 

rVh^      wholesalers,  many  of  whom,  " seeing  the  handwriting 

if"?  7^ -  ^^  ^^^  wall,"   are  taking    up  specialties  themselves 

ture       as  manufacturers.     For    example,   we  have  Eskay's 

Food,  Calox  Tooth  Powder,  Riveris  Talcum  Powder, 

Pebeco  Tooth  Paste,  Steero  Bouillon  Cubes,  etc.,  etc.,  all  made, 

marketed  and  advertised  by  prominent   "wholesale  druggists." 

Manufacturers  assert  that  the  jobber  has  only  himself  to 
blame  for  his  loss  of  the  most  desirable  part  of  his  business 
as  a  distributor.  The  jobber  has  taught  the  retailer  how  to 
substitute  successfully,  and  the  jobber  is  more  directly  respon- 
sible for  substitution  than  all  other  causes  combined. 

When  an  advertised  article  became  sufficiently  successful, 
the  first  thing  the  jobber  did  was  to  offer  the  retailer  something 
else  to  take  its  place,  usually  under  the  jobber's  label.  The 
jobber's  salesmen,  to  get  business,  told  the  retailer  that  his 


*Priniers'  Ink,  August  25,  1910,  p.  38. 


ADVERTISING  AND  THE  WHOLESALER       219 

product  was  "just  as  good  as"  or  "just  the  same  as" and  gave 
the  retailer  a  big  margin  of  profit  to  push  these  goods.  The 
retailer  was  interested  and  in  many  cases  substitution  in  his 
store  dated  from  the  day  the  jobber  taught  him  hoiv  to  do  it. 
From  this  beginning  came  the  substitution  evil  and  from  the 
teaching  of  the  jobber  the  retailer  soon  learned  how  easy  it 
was  to  buy  goods  from  a  manufacturer  under  his  own  label 
so  the  jobber  is  now  getting  cut  off  from  a  considerable  portion 
of  that  class  of  trade. 

In  the  meantime,  the  manufacturer  of  the  advertised  specialty 
began  to  wake  up  to  the  fact  that  the  jobber  was  doing  him 
more  harm  than  good  and  that  while  the  jobber  was  filling 
all  orders,  calling  for  the  advertised  specialty,  his  salesmen 
were  in  reality  working  against  the  interests  of  the  advertiser 
by  pushing  competitive  goods  under  the  jobber's  own  label. 
Who,  then,  is  to  blame  if  the  manufacturer  of  an  advertised 
specialty  feels  that  his  interests  can  best  be  served  by  going 
to  the  "worth  while"  retail  trade  direct  and  giving  them  all 
the  profit  there  is  in  his  article.  In  giving  the  retailer  the  profit 
formerly  allowed  the  jobber,  the  manufacturer  is  going  a  long 
way  toward  preventing  the  substitution  the  jobber  has  en- 
couraged. The  additional  profit,  represented  by  the  wholesale 
discount,  makes  the  retailer  more  friendly  to  the  product  in 
question  and  under  such  circumstances  the  dealer  can  hardly 
afford  to  be  antagonistic  or  to  attempt  substitution. 

The  position  of  the  jobber  to-day  would  be  entirely  different 
if  he  had  acted  merely  as  a  distributor  of  those  goods  which 
his  trade  demanded;  manufacturers  would  still  be  glad  to  take 
advantage  of  the  economies  which  such  service  makes  possible. 
But  manufacturers  who  invest  heavily  in  advertising  and 
succeed  in  popularizing  a  trade-marked  specialty  must  protect 
their  business,  and  under  present  conditions  the  economy 
of  distribution  offered  by  the  jobber  is  too  often  more  than 
offset  by  his  willingness  to  push  an  "own  label"  product  in 
direct  competition  with  the  advertised  article. 

If  the  jobber  is  "doomed,"  as  many  seem  to  think,  who  can 
doubt  that  he  is  to  blame? 

THE   PRIVATE   BRAND   WAR 

Around  the  private  brand  wages  one  of  the  most  violent 
struggles  in  the  jobbers'  war  for  existence.     The  pros  and  cons 


220       ADVERTISING  AS  A  BUSINESS  FORCE 

of  this  method  of  exploiting  sales  are  discussed  in  the  following 
article  by  P.  R.  Barney  and  in  the  letters  which  it  drew  forth 
from  jobbers  and  others : 

*In  summing  up  his  views  on  the  important  question  of 
private  brands,  the  advertising  manager  of  one  of  the  most 
widely  advertised  breakfast  foods  recently  remarked  epigram- 
matically:  "If  I  had  been  in  Mark  Twain's  place  and  owned 
his  reputation,  would  I  have  been  writing  books  and  letting 
some  other  fellow  put  them  out  into  the  market  as  his  own? 
I  guess  not!     The  private  brand  involves  the  same  principle." 

It  is  not  difficult  to  appreciate  what  he  meant  after  a  little 
study  of  the  situation. 

A  certain  manufacturer  of  fine  raincoats  has  long  had  dealings 
with  a  certain  department  store.  He  much  prefers  not  to 
attach  private  labels  to  his  product,  believing  that  the  latter 
should,  for  many  reasons,  bear  his  own  trade-marked  and 
widely  advertised  brand  name 

This  department  store,  however,  has  invariably  stipulated 

that  the  raincoats  it  sold  must  have  its  own  label  attached 

to  them,   refusing  to  accept   them  otherwise.     The 

Rdailers    manufacturer  has  been  compelled  to  capitulate  to  this 

Brands  demand,  rather  than  lose  the  business,  which  is  con- 
siderable. And,  having  made  this  exception  once, 
during  the  early  days  of  his  struggle  for  recognition,  it  is  now 
not  easy  for  him  to  turn  tables  and  refuse  to  sell  this  store 
any  more  privately  labeled  goods. 

But,  in  the  meantime,  what  is  happening.?  The  manufac- 
turer has  been  supplying  the  big  store  with  the  wherewithal 
to  build  up  a  reputation  for  what  is,  in  reality,  a  rival  brand 
of  goods  to  his  own  regular  brand.  The  reputation  for  quality 
which  this  manufacturer's  goods  can  build  up  for  any  brand 
name  which  might  be  attached  to  them  can  now,  at  any  time, 
be  saddled  at  will  by  the  big  store  on  to  the  goods  of  any  other 
raincoat  manufacturer  by  the  mere  sewing  of  the  store's 
private  label  to  the  collars  of  the  latter. 

But  the  department  store,  on  the  other  hand,  happens  to 
be  in  the  manufacturing  business  itself,  in  another  line,  putting 
out  a  widely  advertised,  trade-marked  brand  of  hosiery.  And, 
for  reasons  best  known  to  itself,  it  steadily  refuses  to  do  for 

*Pnnters  Ink,  August  4,  1910,  p.  8. 


ADVERTISING  AND  THE  WHOLESALER  221 

others  what  it  expects  others  to  do  for  it.  In  other  words,  it 
will  not  put  out  its  hosiery  under  private-brand  names.  "The 
sock  is  on  the  other  foot"  then.  The  store's  views  on  the 
question  of  private  brands  are  completely  revolutionized,  all 
of  which  reminds  one  of  the  old  adage:  "The  devil  was  sick, 
the  devil  a  monk  would  be;  the  devil  was  well,  the  devil  a 
monk  was  he." 

Probably  few,  if  any,  products  are  really  labeled  as  private 
brands  because  manufacturers  'prefer  it.  They  may  assert 
that  they  do  business  thus  because  they  like  it  best.  They 
may  even  hypnotize  themselves  into  believing  conscientiously 
they  like  it  best.  But  the  fact  remains  that  private  labels 
are,  in  the  main,  put  on  goods  which  are  the  result  of  over- 
production, or  which  are  of  second  or  third  quality;  or  they 
are  put  on  goods  which  have  not  a  sufficient  financial  backing 
to  accord  them  proper  advertising.  In  the  first  two  instances 
the  goods  are  generally  the  product  of  manufacturers  who 
have  well-established  advertised  brands,  and  who  are  too 
shortsighted  to  see  that  by  so  doing  they  are  cutting  off  their 
own  noses.  In  the  third  and  last  instance  the  manufacturer 
usually  puts  out  nothing  hut  private  brands.  In  his  case,  it 
cannot  be  denied  that  he  hopes  his  product  will  sell  on  the 
basis  of  one  or  a  number  of  comparisons  with  the  real  leader 
in  its  field,which  is  invariably  advertised.  Such  a  manufac- 
turer is,  in  a  sense,  a  business  pirate,  appropriating,  as  his  own, 
reputations  which  neither  his  effort  nor  his  money  was  instru- 
mental in  producing.  Vowing  strenuously  that  he  doesn't 
believe  in  advertising,  he  is  nevertheless  industriously  hanging 
on  to  the  tail  of  the  kite  that  keeps  hivi  up,  by  advertising. 

The  manufacturer  of  private  brands,  almost  without  excep- 
tion, uses  this  classic  argument,  to  the  effect  that  his  method 
of  selling  saves  the  cost  of  advertising,  "the  tolls  of  the  battle 
in  the  columns  of  the  press,  which  must  be  added  to  the  cost 
of  the  goods,"  as  one  such  manufacturer  has  put  it.  Naturally 
this  kind  of  reasoning  utterly  throws  to  the  wind  the  incon- 
trovertible fact  that  the  saving  manufacturing  cost  per  unit 
between  a  maximum  sale  of  a  thousand  on  an  unadvertised 
brand  and  of  a  maximum  sale  of  a  million  on  an  advertised 
brand  is,  without  a  doubt,  far  greater  than  the  cost  of  adver- 
tising. 

But,  aside  from  all  this,  how  does  the  manufacturer  of  private 
brands  fare.'' 


222        ADVERTISING  AS  A  BUSINESS  FORCE 

Says  V.  B.  Brown,  an  ofBcial  of  the  Wabash  Baking  Powder 
Company,  one  of  the  largest  canning  concerns  putting  out 
private  brands:  "Don't  understand  us  as  being  opposed  to 
advertising.  We  are  heartily  in  favor  of  it,  only  we  believe 
in  the  satellite  rather  than  the  system.  That  is,  we  believe 
in  giving  the  retailer  the  initiative  to  build  up  his  trade  on  his 
own  brand  of  goods,  rather  than  in  creating  a  brand  for  our  own 
goods  among  his  trade  and  compelling  him  to  join  the  system. 
His  conscience  never  troubles  him,  because  he  has  saved  the 
consumer  some  money.  A  merchant,  by  handling  his  private 
brand  of  goods,  gets  the  benefit  of  the  advertising  offered  by  it, 
whereas  it  is  of  no  advantage  to  him  to  supply  a  demand  among 
his  trade  that  has  been  created  outside  of  his  own  efforts. 
The  influence  of  the  dealer  is  more  valuable  than  the  columns  of 
the  press." 

The  canner  who  takes  his  position  on  the  side  of  the  private 
brand,  as  above  stated,  seems  to  forget  that  he  is  thereby 
placing  himself  at  the  mercy  of  every  retailer  with  whom  he 
may  do  business.  The  retailer's  every  whimsical  exaction 
as  to  price  must  be  met,  from  time  to  time.  He  can  never 
be  certain  but  that  he  will  find  his  retailers  leaving  him,  taking 
their  private  labels  with  them,  and  going  to  other  and  cheaper 
manufacturers  who  may  have  inferior  private  brands.  The 
consumers  won't  know  of  the  change,  however,  and  will  keep 
on  buying  and  being  cheated,  as  if  nothing  had  occurred. 
And  then  what  of  the  dealer's  conscience  and  the  consumer's 
money.'' 

The  above  relates  largely  to    retail    dealers'    own   private 
brands.     When  it  comes  to  jobbers'  private  brands,  the  objec- 
tions roll  up  even  faster. 
Jobbers'        Extensive  consumer  advertising,  without  a  doubt. 

Brands  ^^  ^  more  practical  guarantee  of  quality  than  any- 
thing else.  The  contrast  as  to  quality  between  the 
standard  advertised  brands  and  the  unadvertised  retailers' 
brands  may  be  great,  but  the  contrast  as  to  quality  between  the 
standard  advertised  brands  and  the  unadvertised  jobbers' 
private  brands  is  far  more  glaring.  Jobbers  are  not  manufac- 
turers. They  have  no  money  invested  in  manufacturing  plants. 
Their  business  success  is  not  dependent  entirely  upon  the  success 
or  failure  of  one  or  another  brand,  as  is  the  case  with  the  manu- 
facturers. The  manufacturers'  whole  business  success  depends 
upon  maintaining  the  quality  of  their  output;  their  everything 


ADVERTISING  AND  THE  WHOLESALER       223 

is  staked  upon  it.  Not  so  with  the  jobber.  If  the  jobber  loses 
money  because  of  the  poor  quality  of  his  private  brand  of  corn, 
he  can  make  it  up,  and  more,  on  his  private  brand  of  flour. 

The  New  England  Association  of  Manufacturers'  Repre- 
sentatives recently  issued  a  treatise  condemning  the  private 
brand  evil  of  which  the  following  is  a  part : 

Wholesalers  will  seldom,  if  ever,  pay  more  for  their  brand 
than  for  the  standard  brands.  Generally  they  expect  to  buy 
cheaper.  The  quality  is,  therefore,  adjusted  to  meet  the 
price. 

If  manufacturers  had  any  inferior  goods  to  work  off,  would 
they  not  be  more  likely  to  sell  them  under  grocers'  brands  than 
under  their  own.f* 

Retailers  frequently  buy  goods  by  sample  the  first  lot,  but, 
when  wholesalers  change  their  quality  or  source  of  supply, 
they  never  notify  the  trade.  The  quality,  therefore,  may  be 
excellent  this  year,  but  poor  next.  Manufacturers  spending 
large  sums  in  advertising  and  pushing  their  goods  cannot 
afford  to  trifle  with  the  quality  and  thus  injure  their  reputation 
and  trade. 

Legitimate  manufacturers  appreciate  the  value  and  necessity 
of  turning  out  a  fine  article  under  their  own  label  and  realize 
that  it  does  not  make  much  difference  what  is  put  under  a 
wholesaler's  brand,  provided  it  passes  the  buyer's  approval 
as  to  price. 

Official  reports  show  that  few  manufacturers'  brands  are 
among  the  goods  found  adulterated  by  boards  of  health,  while 
wholesalers'  brands  so  condemned  are  many. 

Many  wholesalers  are  dropping  private  brands  since  the 
passage  of  the  pure  food  laws,  while  others  are  restricting  such 
brands  to  the  state  limits  so  as  not  to  clash  with  the  na- 
tional law. 

The  National  Food  Magazine  recently  offered  an  editorial 
on  this  very  important  topic,  which  read  in  part  as  follows : 

"This  'private  brand'  man  manufacturing  goods  to  sell 
within  the  state  of  manufacture  is  in  the  business,  not  to  make 
a  reputation,  but  to  make  money  and  to  make  it  rapidly. 
Hence  his  scheme  is  to  doctor  and  dose  the  foods  in  ways 
possible  to  cheapen  the  cost  of  production.  He  employs  the 
cheapest  help;  he  buys  the  raw  products  at  the  lowest  price; 
he  even  buys  the  decomposed  and  cast-off  products  of  legitimate 
factories  and  by  chemical  preservatives  and  coloring  makes 


224        ADVERTISING  AS  A  BUSINESS  FORCE 

them  into  foods  sold  to  the  consumer  as  pure,  wholesome 
comestibles. 

"  Inasmuch  as  jobbers'  private  brands  are  not  advertised  to 
the  consumers,  it  falls  to  the  lot  of  the  retailers  to  do  all  the 
hard  work  of  introducing  them.  And  then  any  one  of  a  number 
of  different  questions  as  to  quality,  price,  credit,  or  discounts 
may  make  it  highly  advantageous  to  change  to  some  other 
jobber's  private  brand,  which  means  begin  the  introductory 
work  all  over  again. 

"  But  possibly  nothing  more  eloquent  illustrates  the  un- 
wisdom of  private  brands  than  the  ever-increasing  number 
of  reputable  manufacturers  who  are  joining  the  ranks  of  those 
who  refuse  to  put  out  private  brandg.  Among  the  canners 
alone,  they  number  the  Van  Camp  Packing  Company,  Indian- 
apolis; the  California  Fruit  Canners' iVssociation,  San  Francisco; 
W.  R.  Roach,  Hart,  Mich.;  Strasbaugh,  Silver  &  Co.,  Aberdeen, 
Md.,  and  the  H.  J.  Heinz  Company,  Pittsburgh.  And  what 
is  true  in  the  canning  industry  may  be  foreseen  in  any  number 
of  other  lines." 

This  article  drew  out  a  number  of  letters  for  and  against  the 
private  brand.  The  following  were  printed  as  tj7)ical  of  the 
main  arguments  on  either  side 

*A.  C.  Hammesfahr,  the  Western  representative  of  Collier's 
in  Chicago,  states  his  beliefs  as  follows: 

Editor  of  Printers'  Ink: 

The  article  in  the  August  4th  issue  of  Printers'  I)ik  en- 
titled "The  Private  Brand  Pitfall,"  interested  me  very  much, 
especially  the  paragraph  quoting  A.  B.  Brown,  of  the  Wabash 
Baking  Powder  Company.  Having  had  retail  experience 
in  a  business  where  baking  powder  was  sold,  I  may  be  qualified 
to  give  some  information  that  may  be  of  interest. 

The  big  percentage  of  our  customers  were  from  the  great 
middle  class,  although  much  of  our  goods  attracted  the  better 
class.  I  remember  one  time  that  we  put  in  quite  a  stock  of 
our  private  brand  baking  powder  —  by  that  I  mean  baking 
powder  with  our  own  label  on  it.  A  twenty-five  cent  package 
was  over  twice  as  large  as  the  same  priced  box  of  Royal. 

*Pnnters  Ink,  August  25,  1910,  p.  41. 


ADVERTISING  AND  THE  WHOLESALER       225 

It  looked  good  to  us,  but  when  I  tell  you  that  at  the  end  of 
a  year  we  had  only  sold  about  a  dozen  boxes  you  will  realize 
that  private  brand  had  no  attractions  for  us  after  that. 

At  that  time  I  didn't  know  much  about  advertising,  but  I 
learned  it  was  mighty  good  business  to  handle  goods  that 
people  knew  and  required  almost  no  effort  to  sell.  When  we 
were  carrying  hundreds  of  different  articles  it  didn't  pay  to 
take  the  time  to  push  a  private  brand. 

This  same  condition  prevailed  in  connection  with  bottled 

and  canned  goods.     Several  times  we  bought  pickles,  catsup, 

etc.,    from    local    people.     The    consumer,    however,    usually 

came  to  the  store  asking  for  Van  Camp's  and  Snider's  Beans, 

Heinz's  and  Snider's  Catsups,  and   so  on  down  the 

The  Place  line  in  connection  with  practically  everything  that  we 

0Jl;^^^    handled. 

Brand  I  believe,  however,  that  private  brands  can  be  used 
very  effectively  in  many  of  the  poor  districts  in  the 
big  cities  like  Chicago  because  there  are  so  many  people  in 
these  sections  who  do  not  know  the  different  articles  by  name 
on  account  of  lack  of  education  and  also  because  quantity  is 
the  important  factor  with  them.  A.  C.  Hammesfahr. 

On  the  other  hand,  S.  W.  Roth,  editor  of  The  Retailers* 
Journal  and  The  Wholesale  Grocer,  Chicago,  elucidates  his 
beliefs  on  the  private  brand  question  in  part  as  follows : 

Editor  of  Printers'  Ink: 

In  his  consideration  of  the  question  of  private  brands,  P.  R. 
Barney,  in  the  August  4th  issue  of  Printers'  Ink,  predicates 
his  whole  line  of  reasoning  upon  theories  that  are  plausible 
enough,  but  which  do  not  work  out  in  practice. 

When  a  wholesale  grocer  has  a  private  brand  packed  by 
a  manufacturer,  he,  and  not  the  manufacturer,  is  responsible 
for  the  success  of  that  brand. 

He  does  not  hire  an  inferior  manufacturer  to  put  up  fine 
goods,  any  more  than  a  publisher  would  hire  a  poor  man  to 
do  good  editorial  work.  The  result  of  the  product  in  either 
case  depends  upon  the  man  who  is  having  the  work  produced. 
It  is  his  judgment,  his  energy,  his  direction,  his  capital  that 
enters  into  the  success  of  the  product  created. 

In  a  slightly  different  sense,  the  same  thing  is  true  of  the 


226        ADVERTISING  AS  A  BUSINESS  FORCE 

manufacturer.  He  does  not  plant,  pick  and  pack  the  tomatoes 
that  go  into  the  can  bearing  his  brand.  Neither  does  he  con- 
duct the  advertising  campaign  or  sales  force  necessary  to  put 
value  in  his  brand,  commensurate  with  the  quality  of  the  goods. 
He  hires  good  help  to  do  this  work.  Still  he  is  the  manufacturer 
because  he  is  the  directing  force. 

Mr.  Barney  supposes  that  packers  with  a  reputation  for 
packing  fine  goods  for  others  are  entitled  to  the  reputation 
that  resides  in  the  brand.  He  ought  to  know  that  the  identical 
quality  may  be  put  up  by  other  packers  without  in  any  way 
affecting  the  brand  value.  It  is  the  brand  the  consumer 
wants,  because  the  precise  quality  for  which  the  brand  stands 
is  known. 

The  manufacturing  wholesale  grocer,  who  has  his  private 
"brand,"  is  just  as  jealous  of  the  reputation  of  that  brand 
as  any  specialty  manufacturer  is  of  the  brand  he  has  created. 
The  jobber  has  his  ideal,  and  if  he  hires  a  manufacturer  to  put 
up  his  goods,  he  insists  on  having  them  put  up  his  way.  If  one 
manufacturer  does  not  satisfy  him  he  turns  to  one  who  will. 
Whatever  value  he  finally  creates  in  his  brand  name  comes 
to  the  wholesale  grocer,  as  a  result  of  his  efforts.  The  manu- 
facturer is  simply  his  hired  man,  albeit  he  may  be  a  good  one. 

Mr.  Barney's  notion  that  a  manufacturer  packs    his  best 

goods   under   his  own  brand,    and  puts  what  is  left  into  the 

Fair  Play  jobber's    packages,   is   not    worth    considering    any 

is  the  further  than  to  call  attention  to  the  fact  that  such 
Solution    a   relationship   between   the   manufacturer  and   the 

of  the  jobber  is  not  possible.  Of  the  hundreds  of  packers  of 
^^^  ^  vegetables  and  fruits  in  this  country,  those  who  put 
up  goods  under  their  own  brand  may  be  counted  on  the  fingers 
of  one  man's  hands. 

The  manufacturer  spends  thousands  of  dollars  promoting 
his  brand  among  customers.  Having  covered  the  entire 
country  with  his  consumer  and  retail  grocer  advertisements,  he 
cannot  afford  to  create  the  machinery  necessary  to  take  advan- 
tage of  this  advertising.  It  would  mean  a  sales  force,  a  dis- 
tributing force,  and  a  collection  force  in  each  important  city 
of  the  country.  All  of  this  force  would  be  devoted  to  the 
business  of  handling  one  item. 

The  wholesale  grocers  in  every  section  of  the  country  main- 
tain such  forces,  and  they  are  able  to  do  so  effectively,  because 
they  are  handling  goods  of  great  variety.     Their  territory  may 


ADVERTISING  AND  THE  WHOLESALER       227 

be  circumscribed  with  respect  to  certain  lines  of  goods,  but 
it  is  thoroughly  covered.  This  machinery  which  the  wholesale 
grocer  has  created  is  valuable  to  the  manufacturer  who  pro- 
motes the  sale  of  his  goods  to  the  consumer  all  over  the 
country,  and  he  naturallj^  takes  advantage  of  it. 

The  specialty  man  would  like  to  have  the  jobber  push  his 
brand.  The  jobber  feels  he  cannot  afford  to  do  this.  His 
own  brands  have  become  a  necessity,  and  in  his  own  special 
territory  he  is  bound  to  push  these.  His  aim  is  to  associate 
his  brand  name  with  goods  of  high  quality,  so  that  the  consumer 
becoming  accustomed  to  the  name  will  buy  anything  under 
that  brand  name  with  the  full  assurance  that  the  goods  will 
be  satisfactory. 

The  jobber  does  not  confine  his  brand  name  to  one  brand 
of  goods.  He  carries  a  long  line  under  one  brand,  and  when 
a  retail  grocer  creates  a  good  trade  for  such  goods,  the  jobber 
feels  that  he  has  made  a  customer  who  will  not  only  carry 
his  "brands,"  but  will  buy  bulk  goods  from  him  as  well.  This 
is  one  of  the  prime  objects  of  jobbers'  private  brands. 

Another  is  that,  once  his  brands  become  established  in  his 
particular  territory,  he  is  not  at  the  mercy  of  a  salesman, 
as  he  would  be  without  private  brands.  The  salesman  may 
go  to  another  firm,  but  he  cannot  take  his  trade  with  him, 
because  the  retailer  feels  he  must  have  the  house  brands,  for 
which  a  demand  has  been  established. 

The  jobber  does  not  advertise  his  private  brands  to  the 
consumer  by  means  of  general  consumer  advertising,  as  the 
manufacturer  of  a  single  item  does.  If  he  did,  much  of  his 
advertising  would  be  wasted.  The  jobber's  method  is  to  adver- 
tise to  the  retailer  through  the  grocery  papers,  to  circularize 
his  particular  territory,  and  to  promote  sales  through  his 
traveling  salesmen.  In  short,  the  methods  of  both  manufac- 
turer and  jobber  differ,  of  necessity,  because  of  the  nature 
of  their  business  organizations. 

Finally,  the  manufacturer,  with  his  special  brand,  and  the 
jobber,  with  his  private  brand,  will  dwell  in  peace  if  they  play 
fair  with  each  other.  Each  has  his  rights  in  business  equity, 
and  each  has  the  means  of  protecting  himself  from  the  unfairness 
of  the  other.  The  private  brands,  however,  are  here  to  stay. 
There  will  be  more  before  there  are  less,  and  we  may  be  certain 
that  the  quality  of  the  jobber's  private  brands  will  continue 
to  improve.  S.  W.  Roth. 


228        ADVERTISING  AS  A  BUSINESS  FORCE 

From  the  manufacturer's  standpoint  the  great  trouble  with 
the  private  brand,  of  course,  is  the  fact  that  the  producer 
loses  control  over  his  distribution  to  a  degree  almost  ex- 
actly  proportionate   to  the    success  of  the  jobber's 

Roc^  "  private  brand  exploiting  campaign.  One  of  the  most 
Manufac-  ingenious  methods  ever  employed  by  a  manufacturer 
PI  ^nned  to  ^^  redeeming  the  control  of  his  product  from  a  chain 

Reclaim    of  private  brand  outlets  is  found   in  the  case  of  the 

B  ss  General  Roofing  Company.  This  concern  took  on 
one  contract  after  another  to  supply  roofing  to 
jobbers  for  sale  under  a  private  brand  until  it  found  that, 
while  it  was  producing  enormous  quantities  of  roofing,  the  sale 
of  it  was  practically  all  under  trade-marks  owned  by  jobbers. 
The  clever  method  by  which  they  put  a  blanket  plan  of  trade- 
mark control  over  their  entire  output  is  told  in  the  following 
story,  written  by  Frank  T.  Hill: 

.  .  .  *The  company  had  been  making  roofing  for  a  good 
many  years,  and  had  built  up  three  separate  factories  with  an 
output  of  roofing  materials  of  large  dimensions.  This  had 
been  done  by  trade-paper  advertising  and  direct  work  on  dealer 
and  jobber.  The  bulk  of  the  output  went  to  the  consumer 
under  jobbers'  private  brands. 

Now,  when  it  was  proposed  to  advertise  direct  to  the  con- 
sumer and  tell  him  some  plain  truths  about  roofing,  the  question 
naturally  arose,  "What  roofing  are  we  going  to  advertise.'" 
Obviously,  to  go  to  the  consumer  with  a  new  brand  of  roofing 
or  simply  to  push  the  General  Roofing's  trade-mark  —  a  polite, 
military  gentleman  with  his  hat  in  his  hand  —  would  be  to 
start  competing  with  the  company's  own  customers.  The 
jobbers  who  were  selling  the  company's  goods  under  their 
own  brands  could  be  depended  upon  to  object,  more  forcibly 
than  delicately.  They  could  hardly  be  expected  to  favor  an 
educational  campaign  which,  while  imdeniably  telling  the  truth 
about  roofing  as  they  saw  it,  yet  directed  the  consumer's  atten- 
tion toward  some  other  brand. 

To  go  to  the  consumer  with  a  new  brand  of  roofing  luojuit, 


*Printers   Ink,  February  29,  1912,  p.  100. 


ADVERTISING  AND  THE  WHOLESALER       229 

simply  and  brutally,  to  sacrifice  a  large  portion  of  the  company's 
business.  Not  to  go  to  the  consumer  meant  that  the  roofing 
concerns  which  icere  doing  so  would  make  off  with  a  comfortable 
slice  of  it.  It  looked  for  a  while  as  though  it  was  Hobson's 
choice,  and  that  the  loss  would  have  to  be  pocketed  in  the  end. 

The  General  Roofing  concern  was  right  in  the  position  in 
which  a  great  many  manufacturers  of  private  brand  goods  find 
themselves.  There  was  plenty  of  consumer  good-will  attached 
to  the  company's  products,  yet  mighty  little,  if  any,  to  the 
company's  own  trade-mark.  The  consumer  knew  this  brand 
or  that  brand  which  belonged  to  this  or  that  jobber,  but  he 
didn't  know  anything  about  the  manufacturer  of  the  goods. 
Each  individual  jobber  could  buy  somewhere  else  and  still 
keep  his  brand  and  the  good  will  adhering  to  it.  Consumer 
advertising  which  could  take  advantage  of  the  good  will  already 
belonging  to  the  several  brands  would  be  a  success.  Adver- 
tising which  sacrificed  this  good  will  at  the  start  would  have 
a  long  row  to  hoe,  if  it  didn't  fall  down  completely. 

A  way  was  finally  found  not  only  to  reach  the  consumer 
effectively,  but  also  to  get  the  benefit  of  what  prestige  had 
already  been  attained  by  the  jobbers'  brands. 

The  first  step  was  to  coin  a  name  which  could  be  applied 
to  all  roofing  of  the  company's  manufacture,  no  matter  under 
what  brand  it  had  been  previously  sold.  The  words  "certified " 
and  "guaranteed"  were  combined  so  as  to  form  the  name 
"Certain-teed."  A  label  was  designed  with  this  word  featured 
prominently  —  leaving  off  the  manufacturer's  name,  however 
—  which  was  called  the  "Certain-teed  label."  When  this 
label  was  afiixed  to  a  roll  of  roofing,  either  a  jobber's  brand 
or  the  manufacturer's  own  mill  brand,  it  provided  something 
to  advertise  which  would  not  conflict  with  any  existing  arrange- 
ments. The  company  did  not  advertise  General  roofing,  or 
any  jobbers'  brand  of  roofing,  but  "Certain-teed  Roofing," 
which  is  the  same  thing,  with  a  difference. 

The  Certain-teed  label  was  not  given  the  jobbers  or  retailers 
to  paste  on  the  stock  they  had  on  hand.  This  prevented  it 
from  "accidentally"  getting  on  roofing  material  made  by  some 
other  manufacturer.  Each  salesman  was  given  a  supply  of 
the  labels  with  instructions  to  personally  paste  them  on  any 
of  the  "  General's  "  rolls  of  roofing  which  he  found  in  the  jobbers' 
or  dealers'  hands. 

Beginning  the  first  of  the  year,  this  label  was  pasted  on 


230        ADVERTISING  AS  A  BUSINESS  FORCE 

each  roll  shipped  from  each  mill.  It  stood  for  the  manufac- 
turer's responsibility,  the  quality  of  the  goods,  a  guarantee 
of  the  process  of  manufacture:  While  the  jobber's  private 
label  stood  for  the  service  the  jobber  renders  to  the  retailer- 
price,  quick  delivery,  extension  of  credit,  etc. 

The  second  step  in  the  campaign  was  to  mail  to  every  jobber 
in  the  country  —  whether  or  not  he  handled  the  General's 
Roofing  —  a  large  illustrated,  descriptive  circular,  and  enclosed 
with  it  a  similar  circular  directed  to  the  dealer  and  a  booklet 
for  the  consumer.  The  consumer's  booklet  was  bound  in 
the  middle  of  a  large  circular  to  the  dealer. 

In  the  jobber's  circular  it  was  explained  that  here  was  a 
campaign  that  was  entirely  different  from  anything  that  had 
ever  been  attempted  before.  In  it  the  "Certain-teed"  label 
was  reproduced  and  the  jobber  was  thoroughly  impressed  with 
the  fact  that  this  campaign  was  carried  on  entirely  for  his  benefit. 
His  attention  was  called  particularly  to  the  circular  enclosed, 
which  was  being  sent  to  the  dealer,  also  the  consumer's  booklet. 

In  this  circular  and  through  the  salesman  the  jobber  was 

impressed  with  the  fact  that  this  Certain-teed  label,  in  addition 

to  his  oivn  private  brand,  would  standardize  the  roofing 

Roofing  and  give  to  his  private  brand  an  added  value  both  in 
^Sets  of'  ^^^  &yGs  of  the  dealer  and  consumer;  that  the  Cer- 

Brands  tain-teed  label  was  constructed  in  such  a  way  that  the 
identity  of  his  private  brand  would  not  be  lost  nor 
interfered  with  in  any  way. 

In  the  circular  to  the  dealer  twelve  of  the  advertisements  to 
the  consumer  were  reproduced  and  the  keynote  to  this  circular 
was,  "How  the  'General'  will  help  you  sell  more  roofing." 
The  Certain-teed  label  was  featured  very  prominently,  and  by 
illustration  and  copy  the  dealer  was  given  a  good  reason  why 
he  should  buy  from  the  jobber  instead  of  sending  orders  direct 
to  the  mill. 

The  campaign  to  the  consumer  in  the  farm  publications  and 
mail-order  papers  was  explained  in  detail.  The  dealer  was 
told  that  the  "General"  was  with  him  in  his  fight  against 
mail-order  competition;  that  it  was  intended  to  fight  fire  with 
fire,  and  the  "General's"  advertisements  would  appear  in  the 
same  publications  that  the  mail-order  houses  were  using  to  sell 
roofing;  that  in  each  and  every  advertisement  the  consumer 
would  be  advised  to  buy  roofing  from  his  local  dealer. 

The  Certain-teed  label  was  featured,  and  in  many  ways  the 


ADVERTISING  AND  THE  TVTHOLESALER       231 

prospective  customer  was  shown  how  and  where  he  could  use 
Certain-teed  roofing,  in  rolls  or  shingles.  After  this  came  an 
illustrated  article  entitled,  "Let  us  take  a  picture  trip  through 
one  of  the  'General's'  mills." 

This  part  of  the  copy  was  devoted  to  good,  strong  reasons 
why  the  "General"  made  a  better  roofing  at  a  lower  price, 
rather  than  to  a  technical  description  of  how  ready  roofing 
is  manufactured.  On  the  pages  that  followed  this  were  illus- 
trated the  different  grades  of  the  "General's"  brands,  and  it 
was  explained  that  this  same  grade  was  being  sold  throughout 
the  country  bearing  jobbers'  private  brands,  in  addition  to 
the  Certain-teed  label. 

In  the  closing  copy  the  prospective  customer  was  urged  to 
buy  Certain-teed  roofing  from  his  local  dealer,  and  gave  a  num- 
ber of  good,  strong,  substantial  reasons  why  he  should  do  so. 

In  the  advertisements  in  farm  papers  the  Certain-teed  label 
and  the  booklet  were  featured  very  prominently;  in  addition 
to  this  the  copy  was  to  carry  with  it  a  plan  of  education  along 
two  lines,  namely,  to  show  that  the  various  tests  often  applied 
to  roofing  were  "nonsensical  rot,"  and  also,  by  illustration  and 
copy,  to  point  out  to  the  man  living  in  the  small  town  as  well 
as  the  farmer  a  hundred  different  ways  in  which  he  could  use 
Certain-teed  roofing  which  he  had  never  before  thought  of. 

The  copy,  which  was  placed  by  the  Mahin  Advertising 
Company,  ran  from  full  page  down  to  three  inches  single 
column.  In  the  larger  advertisements  a  coupon  was  used  to 
make  it  easy  and  convenient  for  prospective  customers  to  send 
for  the  booklet,  which  was  offered  free.  In  the  smaller  adver- 
tisements the  booklet  was  illustrated.  In  each  advertisement 
the  trade-mark  figure  of  the  "  General "  appears  and  the  Certain- 
teed  label  —  in  many  instances  the  Certain-teed  label  being 
shown  on  a  roll  of  roofing. 

Six  of  the  best  salesmen  —  two  from  each  mill  —  were 
formed  into  a  "Flying  Squadron."  These  men  travel  under 
a  roving  commission,  covering  the  country  from  one  end  to 
the  other,  and  work  with  jobbers  and  dealers  at  each  point 
where  the  trade-promotion  manager,  James  C.  Woodley,  feels 
they  can  be  used  to  the  best  possible  advantage. 

The  efforts  of  the  sales  force  are  also  being  supplemented 
by  a  vigorous  educational  campaign  to  the  dealer  and  jobber 
in  the  trade  papers. 

If  the  campaign,  which  has  started  well,  proves  a  success. 


^32        ADVERTISING  AS  A  BUSINESS  FORCE 

it  will  go  far  toward  solving  a  perplexing  problem,  and  will 
show  one  way  at  least  whereby  a  manufacturer  need  not  sacri- 
fice trade  already  secure  by  "going  over  its  head"  to  the 
consumer. 

WHEN  THE  JOBBER  APPEALS  TO  THE  CONSUMER 

The  results  which  the  jobber  can  accomplish  when  he  actually 
undertakes  to  aggressively  push  any  line  need  no  demonstration. 
But  the  case  of  the  development  of  the  American  business  in 
"Steero"  as  told  by  Charles  W.  Hurd  may  be  useful  in  suggest- 
ing methods  of  doing  this  kind  of  work.  This  case  also  shows 
that,  so  far  as  ingenuity  and  skill  in  exploiting  and  marketing 
goods  are  concerned,  the  wholesale  distributor  may  be  on  a 
footing  quite  as  sound  as  the  producer  of  the  goods : 

*The  unusually  rapid  distribution  of  "Steero"  Bouillon 
Cubes  is  chiefly  explained  by  the  very  fortunate  connection 
which  the  manufacturers,  the  American  Kitchen  Products 
Company,  have  with  a  leading  jobbing  firm  in  the  drug  line, 
Schieffelin  &  Co.,  of  New  York.  If  it  had  not  been  for  this, 
all  of  the  excellent  magazine  copy  which  has  been  put  out  wuth 
sampling  offer  attached,  all  of  the  demonstrations  which  have 
been  made,  all  of  the  well-built  dealer  and  consumer  literature, 
and  other  work  on  the  trade  would  have  fallen  far  short  of 
the  present  results.  With  the  close  co-operation  of  this  jobber, 
and  in  consequence  of  its  reputation,  a  thoroughly  national 
distribution  has  been  secured  for  this  food  novelty  in  less  than 
three  years  and  the  manufacturers  are  now  ready  to  proceed 
to  the  next  step  of  intensification. 

"Steero"  has  for  many  years  enjoyed  a  large  sale  abroad, 
particularly  in  Germany,  where  it  originated.  Carl  W.  Rade- 
macher,  the  original  manufacturer  of  bouillon  cubes,  who  made 
a  large  fortune  from  them,  came  here  in  1907  to  introduce 
them,  and  spent  two  years  in  a  comparatively  vain  attempt 
to  make  headway.  In  1909  his  American  rights  and  properties 
were  taken  over  by  the  American  Kitchen  Products  Company, 
of  which  Henry  S.  Livingston,  secretary  of  Schieffelin  &  Co., 
is  also  secretary,  and  the  rest  of  the  story  is  plain. 

*Printers'  Ink,  January  25,  1912,  p.  24. 


ADVERTISING  AND  THE  WHOLESALER       233 

"Steero"  bouillon  cubes  are  "distributed  and  guaranteed" 
by  Schieffelin  &  Co.  This  operates  to  great  advantage  not 
only  in  the  drug  line,  but  in  the  grocer3%  delicatessen,  retail 
liquor  and  candy  store  lines,  to  all  of  which  "Steero"  goes, 
for  use  in  the  home,  at  the  soda  fountain,  bar,  and  on  outings. 

The   connection  with  Schieffelin  &  Co.,  is  not  permitted  to 

work  to  the  disadvantage  of   other  jobbers  in  the  drug  line. 

All  orders  taken  in  any  way  are  turned  over  to  the 

"Steero"  dealer's  jobber.     But  the  Schieffelin  national  selling 

Exploited  machinery  and  influence  were  put  squarely  behind 

Jobbing    ^^^^  "Steero"  proposition  and  it  has  helped  as  hardly 

House  anything  else  could.  The  "  Steero  "  people  have  been 
able  to  turn  over  all  the  responsibility  for  taking  care 
of  the  drug  trade  to  the  jobber  and  have  only  found  it  nec- 
essary to  detail  the  grocery,  delicatessen,  and  candy  stores, 
which  they  are  doing  at  the  present  time. 

With  a  national  distribution  assured  in  a  short  time,  though 
not  perfected,  through  the  jobbers,  the  American  Kitchen 
Products  Company  began  to  advertise.  It  went  first  into  the 
woman's  magazines  and  the  weeklies,  taking  small  space  in 
the  beginning,  generally  thirty  and  sixty  lines. 

"Steero,"  being  the  original  bouillon  cube  in  this  country, 
the  task  that  fell  to  the  original  copy  was  to  educate  the  public 
to  the  use  of  the  cubes.  Bouillon  had  previously  been  sold 
in  bottles,  from  which  it  had  to  be  measured  out  in  a  spoon 
for  use.  "Steero"  cubes  promised  an  advance  over  this.  All 
that  was  necessary  to  do  was  to  drop  a  cube  in  a  cup  and  pour 
boiling  water  over  it.     It  was  the  acme  of  simplicity. 

So  the  early  copy  pointed  this  out  in  picture  and  print.  The 
cup  was  shown  with  the  cube  in  it,  dissolving  under  a  stream  of 
hot  water  issuing  from  the  spout  of  a  kettle.  Sometimes  larger 
space  was  taken  to  show  the  operation  in  a  series :  The  package, 
the  cube,  the  fingers  dropping  the  cube  into  the  cup,  and  the 
stream  of  boiling  water  dissolving  the  cube. 

Having  explained  the  method  of  use  (with  the  valued  assist- 
ance of  a  number  of  competitors)  the  copy  next  proceeded 
to  explain  the  variety  of  uses.  W^hile  necessarily  retaining  the 
cup  and  boiling  water  idea,  last  year's  advertising  copy  painted 
in  human  interest  backgrounds:  How  "Steero"  is  served  at 
afternoon  teas,  how  it  cheers  after  a  long  walk,  how  used  by 
automobilists,  by  yachting  parties,  how  served  at  soda  fountains 
in  drug  and  candy  stores  and  how  given  to  children;  all  these 


234        ADVERTISING  AS  A  BUSINESS  FORCE 

various  uses  are  pictured  in  an  interesting  way  with  wording 
to  match. 

At  the  same  time  that  this  style  of  copy  was  being  developed, 
another  need  developed.  Competition  having  arisen  along  this 
same  line,  it  became  necessary  to  identify  the  name  more  closely 
with  the  product.  This  was  done  in  part  by  incorporating 
the  package  in  the  advertisement  and  in  part  by  picturing  the 
bouillon  served  in  a  cubical  cup.  It  may  be  possible  to  get 
names  like  "Steero,"  or  paraphrase  the  slogan,  "a  cube  makes 
a  cup,"  or  assimilate  the  package,  but  a  patented  cup  cannot 
be  reproduced,  and  the  "Steero"  people,  for  this  purpose, 
have  taken  out  a  patent  on  the  cubical  cup.  They  have  ordered 
a  large  lot  of  these  cups  from  Germany  and  will  put  them  out 
to  drug  stores  and  candy  stores  for  serving  "Steero." 

All  of  the  advertising  carries  an  invitation  to  send  for  free 
samples.  With  these  samples  there  go  back  to  the  inquirer 
a  letter  asking  her  to  order  from  her  grocer  or  druggist  and 
a  descriptive  folder.  The  inquiry  is  then  sent  to  the  dealer. 
The  free  samples  distributed  in  this  way  have  developed  a  de- 
mand in  very  quick  time. 

The  original  magazine  list  has  been  largely  increased  since 

1909.     In  addition   to   the  woman's  magazines  and 

^^'^ ,     the  weeklies  of  large  circulation,  the  advertising  has 

Jobbers  g^j^g  Jj^^q  many  general  magazines  and  class  pub- 
Mediums  Hcations,  as  those  for  children,  for  outdoor  enthusiasts, 
yachtsmen,  actors  and  actresses,  etc. 

At  the  same  time  that  the  list  has  grown,  there  has  been 
an  increase  of  space.  "Steero"  has  grown  from  thirty  lines 
to  a  page,  even  a  page  at  times  in  the  Ladies'  Home  Journal 
and  the  Woman's  Home  Companion. 

The  newspapers  have  not  yet  been  utilized  as  a  medium, 
except  in  one  recent  instance,  for  the  reason  that  the  perfection 
of  a  general  distribution  has  been  first  sought.  Now  that  this 
has  been  practically  accomplished,  the  development  of  local 
territories  may  be  expected. 

The  sole  exception  when  "Steero"  advertising  has  gone  into 
the  newspapers  was  during  the  two  cold  snaps  in  January. 
On  these  occasions  small  double  column  ads  were  run  in  some 
of  the  New  York  papers  to  inform  the  metropolitan  public 
that  "Zero  weather  is  'Steero'  weather." 

In  New  York  City,  street-car  cards  are  displayed  in  several 
of  the  surface  lines  and  more  will  be  taken  on  later.     The  cube 


ADVERTISING  AND  THE  WHOLESALER       235 

idea  has  been  worked  out  in  a  somewhat  humorous  way  in 
some  of  these. 

The  dealer  and  consumer  hterature  in  support  of  this  adver- 
tising campaign  is  unusually  good.  It  is  not  elaborate  so  far 
as  typography  and  paper  go;  the  elaborateness  is  rather  in 
the  direction  specializing  the  interest  of  each  line  of  trade. 
There  is  a  folder  for  the  drug  line,  another  for  the  confec- 
tion store,  another  for  the  retail  liquor  dealer,  another  for 
the  grocer,  and  still  another  for  the  consumer,  the  latter  both 
for  mailing  and  for  store  distribution  by  the  dealer.  The 
folders  are  small  and  tell  the  whole  story  with  picture  and 
description  in  a  minute  or  two.  That  is  what  makes  them 
valuable. 

The  usual  dealer  helps  have  been  furnished  in  the  shape  of 
handsome  hangers  for  store  and  window.  No  special  attention 
has  been  given  window  display  until  recently,  no  pressing, 
necessity  having  previously  been  felt  for  it. 

The  time  has  now  arrived,  however,  when  more  intensive 
work  is  advisable,  and  for  this  purpose  several  distinctive 
pieces  of  window  display  material  have  been  prepared,  one  set 
of  moving  pictures,  another  of  folding  window  cards,  and  an- 
other, a  large  cube. 

One  of  the  greatest  helps  to  the  advertising  and  selling  cam- 
paign has  come  from  the  demonstrations.  These  are  given 
in  the  grocery  departments  of  the  great  department  stores, 
in  groceries  and  in  drug  stores.  Often  there  are  as  many  as 
fifty  of  these  going  on  at  once,  in  cities  all  the  way  across  the 
continent.  Samples  and  literature  are  given  out  at  the  same 
time. 

Sometimes  it  pays  to  work  a  "stunt."  A  good  "stunt" 
probably  always  pays.  At  any  rate,  the  "Steero"  people  are 
working  an  ingenious  "stunt"  and  it  is  very  effective  in  getting 
attention  and  provoking  interest.  The  name  "Steero"  comes, 
of  course,  from  the  word  "steer."  So  the  "Steero"  people 
took  a  couple  of  what,  in  the  back  country,  are  called  "likely 
beef  critters,"  hitched  them  up  to  an  old-fashioned  cart,  put 
on  this  a  mammoth  facsimile  of  the  "Steero"  bouillon  cube 
and  sent  this  outfit  traveling  through  the  country  to  give 
away  free  samples  and  literature  from  house  to  house.  As 
slowly  as  it  moves,  and  limited  as  its  "circulation"  is,  it  never- 
theless has  proved  a  very  profitable  advertising  medium,  with 
results  easily  traceable  to  it. 


236        ADVERTISING  AS  A  BUSINESS  FORCE 

THE  jobber's  relations  WITH  THE  MANUFACTURER 

One  other  phase  of  the  jobbers'  operations  which  is  no  less 
important  than  any  of  those  already  mentioned,  is  the  whole 
group  of  problems  involved  in  the  jobbers'  relations  to  the 
manufacturer  whom  he  still  continues  to  serve.  It  is  perfectly 
clear  that  all  of  these  defensive  methods  adopted  by  the  jobber 
bring  him  into  direct  competition  with  the  producer,  so  that 
if  he  still  continues  to  serve  the  manufacturer  or  producer 
he  is  put  in  the  rather  embarrassing  position  of  competing 
with  his  employer.  This  introduces  a  new  problem  —  the 
preservation  of  genial  and  profitable  relations  between  these 
two  factors  in  the  distribution  system  which  have  been  thrown 
into  somewhat  strained  relations. 

An  opinion  of  the  jobbers'  methods  of  meeting  these  new 
difficulties  in  the  grocery  trade  is  expressed  in  the  following 
terms  by  a  manufacturer.  This  manufacturer  is  not  named 
in  the  article  quoted,  but  the  text  shows  him  to  be  a  manufac- 
turer of  a  package  grocery  product  selling  at  a  fixed  price. 

.  .  .  .  *When  a  manufacturer,  therefore,  has  created 
a  product,  linked  it  with  his  name,  introduced  both  to  the 
public,  and  then  places  the  distribution  of  that  product  in  the 
hands  of  the  jobber,  it  would  seem  that  the  function  of  that 
jobber  should  be  to  loyally  attend  to  its  distribution  and  to 
demand  and  receive  in  return  a  fair  recompense.  If  a  manufac- 
turer fails  to  pay  the  jobber  a  reasonable  profit,  that  jobber 
ought  to  have  the  same  right  that  any  unpaid  servant  has, 
"to  quit  and  go  elsewhere."  We  do  not  think  that  a  manufac- 
turer ought,  in  fairness,  to  require  a  jobber  to  consent  to  an 
exclusive  contract.  We  have  never  objected  to  having  a  jobber 
sell  other  brands  than  our  own,  so  long  as  he  did  it  fairly  and 
allowed  the  law  of  competition  to  take  its  course.  But  when 
the  jobber  is  fairly  treated  (as  profits  go)  and  deliberately 
creates  and  pushes,  as  his  own,  a  rival  brand,  we  think  he  not 
only  displays  poor  loyalty,  but,  in  the  very  nature  of  things, 
destroys  his  own  value  to  the  manufacturer  as  a  safe  and 
trustworthy  distributor. 

*Pnniers  Ink,  September  22,  1910,  p.  29. 


ADVERTISING  AND  THE  WHOLESALER       237 

"In  determining  the  adequacy  of  profit,  I  think  it  fair  that 
the  jobber  should  take  into  consideration  the  relative  sal- 
ability  of  goods.  It  is  figured  broad  and  large  that  it  costs 
7  per  cent,  for  a  jobber  to  do  business,  and  the  average  jobber's 
profit  on  specialties  is  about  10  per  cent.  If  an  article  is  heavily 
advertised,  and,  therefore,  sells  with  little  effort  and  commands 
large  sales,  a  jobber  could  well  afford  to  handle  those  goods 
at  a  smaller  percentage  than  he  could  unadvertised  goods 
which  are  difficult  to  sell,  and  which  move  so  slowly  that  his 
capital  remains  dead  and  locked  up  unprofitably. 

In  response  to  your  third  question  as  to  what  jobbers  are 
doing  to  get  in  wrong  with  manufacturers  and  retailers,  let 
me  reply  that  some  of  them  are  doing  almost  everything  imag- 
inable, though  most  of  them  appear  to  be  acting  pretty  decently. 
Personally,  I  am  disposed  to  think  that  the  jobber's  short- 
comings are  not  born  of  "pure  cussedness,"  but  rather  from 
shortsighted  conceptions  on  one  side  and  under  the  lash  of 
strenuous  competition  on  the  other.  He  is  pretty  apt  to  grasp 
the  "nimble  sixpence"  without  much  regard  to  its  ultimate 
effect  upon  healthy  trade  conditions. 

From  the  standpoint  of  the  manufacturer  —  take  our- 
selves, for  instance  —  the  profit  to  the  jobber  on  our  goods, 
figured  on  his  cost,  is  12  per  cent.  If  some  private 
M% ^*  brand  manufacturer  demonstrates  to  him  that  he  can 
of  Profits  niake  20  per  cent,  on  an  imitation,  he  is  quite  likely 
to  forget  loyalty  to  us;  forget  that  a  support  of  our 
policy  would  conduce  to  his  own  ultimate  welfare;  forget 
that  our  goods  sell  easily  because  of  advertising,  whereas  his 
own  would  require  much  effort;  forget  that  the  advertised  goods 
would  turn  over  oftener  and  make  a  greater  profit  in  the 
course  of  the  year.  He  sees  only  the  extra  percentage  in  the 
private  brand.  He  totally  fails  to  recognize  any  moral  phase 
of  the  question  of  his  own  obligation  to  the  principle  of  reci- 
procity as  a  broad  constructive  force.  Similar  logic  determines 
his  attitude,  in  many  instances,  to  similar  competitive  articles 
which  he  carries  in  stock.  To  his  mind,  too  often,  "the  goods 
that  pay  a  profit  are  those  which  pay  an  immediate  profit, 
on  paper,  without  regard  to  the  ultimate  effect." 

From  the  standpoint  of  the  retailer  the  jobber's  chief 
malefaction  lies  in  his  willingness  to  sell  certain  large  buyers 
whom  the  retailer  regards  as  consumers.  Too  often  the  jobber 
thinks  that  "everything  that  comes  to  his  net  is  fish,"  and  he 


238        ADVERTISING  AS  A  BUSINESS  FORCE 

would  as  soon  take  orders  from  the  hotel,  boarding-house, 
steamship  line,  mining  camp,  and  institution  as  from  the  retailer. 
I  think  this  constitutes  the  sorest  spot  in  the  chafed  relation 
of  jobber  and  retailer.     .     .     . 

The  manufacturing  jobber  is  in  a  somewhat  weak  position 

since  he  occupies  a  position  of  comparatively  inconsequential 

minority  as  compared  with  the  entire  jobbing  equip- 

W   k^ ess  i^^^t-     ^or  instance,  in  Chicago  there  are  probably 

in  the  seventy-five  jobbers,  and  yet  we  have  only  been 
Position  of  obliged  to  cut  off  two  of  them  for  unfair  competition. 
the  Manu-  New  York  has  about  forty,  yet,  when  we  cut  off  the 

jXh"f  ^^^°  biggest  ones  for  unfair  trading,  the  business  was 
entirely  absorbed  and  an  increase  of  21  per  cent,  made 
through  the  extra  efforts  of  the  other  thirty -eight . 

"It  would,  therefore,  appear  that  the  competitive  jobber 
can  easily  be  dispensed  with  by  the  manufacturer  who  has  the 
courage  to  drop  him  as  a  reliance.  Even  suppose,  in  a  certain  big 
city,  that  all  the  jobbers  were  to  rebel  against  a  manufacturer's 
protective  measures.  Within  the  confines  of  a  single  city 
it  would  be  very  simple  for  that  manufacturer  to  meet 
the  situation  by  conducting  his  own  jobbing  house  for 
that  territory  —  or  several  manufacturers  in  co-operation  — 
and  depend  upon  the  local  jobbers  to  take  care  of  outside 
territory. 

Of  course,  when  a  jobber  is  cut  off  by  a  manufacturer  he 
can  always  get  plenty  of  imitation  goods,  whose  manufacturers 
are  ready  to  jump  into  the  gap,  but  no  jobber  of  any  standing 
likes  to  refuse  orders  on  the  plea  that  he  is  unable  to  get  the 
goods  the  retailer  wants.  It  seems  to  us,  therefore,  that  the 
manufacturer  has  the  upper  hand,  and  there  is  considerable 
evidence  that  reputable  manufacturers  are  disposed  to  take 
advantage  of  it  in  checking  the  unfair  competition  of  the 
manufacturing  jobber. 

You  ask  how  we  meet  the  reported  objection  that  the 
grocery  man  cannot  get  a  living  margin  of  profit  on  advertised 
brands.  My  answer  is  "by  giving  him  a  profit  and  then  com- 
pelling him  to  keep  it."  Goods  sold  on  our  schedule  pay  the 
jobber  12  per  cent,  and  the  retailer  almost  30  per  cent.,  which 
is  ample.  We  very  rarely  have  complaints  of  small  profits, 
especially  because  the  goods  turn  over  so  quickly  as  to  make 
an  aggregate  profit  that  is  very  acceptable.  The  argument 
that  advertising  cuts  down  profits  is  not  borne  out  in  our 


ADVERTISING  AND  THE  WHOLESALER      239 

experience,  because  our  cost  of  advertising  amounts  to  only 
five  eights  of  a  cent  per  package  on  the  average. 

You  ask  what  is  to  be  the  outcome  of  certain  tendencies 
in  the  distribution  field.  This  is  as  much  a  puzzle  to  us  as 
to  you.  In  some  thickly  congested  sections  the  chain-store 
system  will  probably  thrive,  and,  of  course,  beget  more  and 
more  buying  exchanges  in  retaliation.  Such  buyers  seeking 
preferment  would  naturally  push  the  brands  that  they  can 
buy  on  a  jobbing  basis,  but  so  long  as  a  manufacturer  maintains 
his  advertising  and  demand,  we  hardly  think  they  will  be  able 
to  altogether  get  along  without  the  goods. 

Buying  exchanges  and  chain  stores  do  not  altogether  elimi- 
nate the  jobbers  in  making  their  purchases,  and  they  never 
can  and  never  will.  The  extent  of  their  preferences  will  be  on 
a  comparatively  few  lines,  and  the  claim  that  such  big  systems 
as  Butler's,  and  the  A.  &  P.,  or  the  Acme  Tea  Company  of 
Philadelphia  are  "Great  Temples  of  Economy  "is  not  true,  as 
applied  to  the  entire  stock  a  grocer  ought  to  carry,  nor  will  it  ever 
be  true.  We  have  been  able  to  keep  up  our  volume  even  in 
their  territory,  though  we  recognize  we  lose  a  large  part  of  the 
distributive  power. 

If  the  manufacturer  accepts  as  an  established  fact  the  use- 
fulness of  the  jobber  in  the  distribution  of  all  or  part  of  his 
products,  the  question  is  soon  forced  home  upon  him,  how 
he  is  to  make  the  jobber  work  the  market  at  something  like 
its  real  capacity.  Manufacturers  through  national  advertising 
have  had  a  taste  of  what  results  can  be  secured  from  intelligent 
product-pushing,  and  they  are  inclined  to  insist  that  any  jobber 
handling  their  goods  shall  render  to  them  as  aggressive  distri- 
bution service  as  they  believe  they  could  secure  if  they  were  to 
undertake  to  distribute  the  goods  on  their  own  account.  The 
following  story  tells  how  one  manufacturer  induced  reluctant 
jobbers  of  his  district  to  take  hold  of  his  goods  and  push  them 
with  genuine  enthusiasm: 

*Texas  jobbers  of  groceries  have  resisted  stoutly  the  efforts 
of  manufacturers  to  enlist  or  force  their  co-operation  in  dis- 

*Sijstem,  April,  1911,  p.  412. 


240        ADVERTISING  AS  A  BUSINESS  FORCE 

tributing  trade-marked  goods.  The  margin  of  profit  on  foods 
nationally  advertised  is,  of  course,  smaller  than  on  the  package 
lines  which  wholesalers  can  buy  unbranded  or  market  under 
their  own  names :  to  exploit  these  and  keep  trade-marked  articles 
in  the  background  has  been  the  policy  of  many  of  the  strongest 
houses  in  the  Lone  Star  State. 

To  meet  this  condition  and  secure  general  distribution  at 
a  stroke,  the  sales  manager  of  a  large  food  company  recently 
planned  and  executed  a  campaign  which  carried  both  jobbers 
and  retailers  by  storm  and  placed  enough  of  the  house's  special- 
ties to  supply  the  state  with  breakfasts  for  a  good  many 
months. 

For  its  launching  he  selected  the  week   when   the   jobbers 

were  meeting  in  state   convention   at  Dallas.     From   various 

selling  districts  in  the  South  and  Middle  West,  he 

Forcing  drafted  thirty-eight  energetic  road  men  and  ordered 
the  Jobber  them  to  report  to  his  assistant  manager  at  Dallas  on 

Reiailer  ^^^^  Sunday  preceding  the  convention.  For  their 
Campaign  accommodation  he  took  almost  an  entire  floor  of  the 
best  hotel  and  prevailed  on  the  manager  to  provide 
a  huge  round  table  in  the  dining-room,  labeled  "For  Pee- 
Kay  salesmen.'  "Pee-Kay"  isn't  the  name.  The  title  the 
placard  bore  is  known  to  very  nearly  every  man  and  woman 
who  sells  or  eats  breakfast  foods  in  the  United  States. 

Before  the  assistant  manager  led  his  company  in  for  Sunday 
evening  dinner,  the  big  table  and  the  reserved  fifth  floor  had 
stirred  the  curiosity  of  every  guest  in  the  hotel.  Many  of  the 
latter  were  wholesale  grocers  already  on  the  ground:  not  one 
of  these  who  was  acquainted  with  the  assistant  manager  — 
he  had  in  the  past  labored  vainly  with  most  of  them  —  but 
stopped  to  shake  hands  and  ask  the  meaning  of  the  assembl3\ 
To  all  the  manager  explained  the  company's  purpose  to  call 
on  every  retail  grocer  in  Texas  during  the  coming  week  and 
back  up  their  selling  efforts  by  advertisements  in  the  newspapers. 
Half  a  dozen  of  the  most  influential  he  asked  up  to  the  fifth 
floor  to  address  the  salesmen  at  their  evening  meeting. 

Acceptance  of  this  invitation  was  inevitable.  The  boldness 
of  the  concerted  attack,  the  number  and  vigor  of  the  men  who 
were  to  execute  it  made  some  measure  of  success  a  certainty. 
The  jobbers  realized  the  value  of  making  an  impression  on  these 
young  men,  by  whom  orders  might  be  turned  in  their  direction 
or  otherwise.     They  climbed  —  such  as  were  asked  —  into  the 


ADVERTISING  AND  THE  WHOLESALER       241 

"Pee-Kay"  band  wagon  and  promised  their  co-operation. 
They  approved  the  advertisements  the  assistant  manager 
exhibited  and  handed  around  in  proofs  upstairs.  If  a  demand 
could  be  created  for  "Pee-Kay"  flakes  and  oats  and  biscuits 
in  Texas,  they  were  there  to  supply  it.  And  the  assistant 
manager,  as  the  enthusiastic  meeting  drew  to  a  close,  sized 
up  his  thirty-eight  men  and  promised  the  demand  would  be 
created.  The  salesmen  had  caught  the  spirit  of  the  invasion 
game,  a  fight  and  a  frolic  as  well  as  hard  work  lay  ahead  of  them. 

Ten  of  the  men  assigned  to  the  most  distant  territories  —  the 
assistant  manager  had  laid  out  routes  for  each  during  his  weeks 
of  preparation  —  were  scheduled  to  leave  on  early  trains  Mon- 
day morning.  These  the  other  twenty-eight  conducted  to 
their  trains  after  breakfast  in  a  joyous  procession  that  stirred 
up  the  town,  attracted  the  interest  of  the  newspapers  and 
informed  arriving  grocers  that  "Pee-Kay"  salesmen  were  "on 
the  job." 

To  the  newspapers,  on  a  dull  Monday  morning,  the  parade 
and  the  plan  behind  it  was  a  feature  not  to  be  overlooked. 
Any  Texan's  pride  would  respond  to  the  fact  that  it  took  thirty- 
eight  star  salesmen  to  cover  his  big  state;  so  they  proceeded 
to  touch  it.  The  grocers'  convention  was  important,  but  the 
"Pee-Kay"  invasion  and  its  purpose  were  given  almost  as 
much  attention  in  the  afternoon  editions.  Marked  copies 
of  these,  the  assistant  sales  manager  and  the  salesman  assigned 
to  Dallas,  mailed  —  in  wrappers  previously  prepared  for  just 
such  use  —  to  all  wholesalers  and  retailers  and  every  newspaper 
in  Texas  the  same  evening.  Meanwhile,  in  dwindling  pro- 
cessions the  salesmen  had  marched  down  to  the  trains  which 
would  land  them  on  their  respective  firing  lines  next  morning. 

The  demonstration  made  its  impression  on  the  jobbers, 
on  the  retailers,  on  the  newspapers  of  the  state  —  the  majority, 
because  of  the  novelty  and  the  sale  of  the  advertising,  noticed 
the  campaign  in  some  way  —  on  buyers  of  breakfast  foods 
and  on  the  salesmen  themselves.  It  illustrated  capitally  the 
virtue  of  concentration,  organization  and  publicity.  Thirty- 
eight  salesmen  might  work  a  month  unnoticed  in  half  the  space 
Texas  fills;  give  them  a  flying  start,  however,  the  sense  of  con- 
certed effort,  the  stimulus  of  competition,  and  the  consciousness 
of  the  public  eye,  though  only  for  a  moment,  and  they  become 
a  force  whose  efficiency  is  quite  beyond  ordinary  measure. 
At  least,  this  was  true  in  "Pee-Kay"  experience. 


242        ADVERTISING  AS  A  BUSINESS  FORCE 

Ten  days  sufficed  to  sell  90  per  cent,  of  the  retail  grocers 
of  the  state.  Then,  perforce,  the  jobbers  fell  into  line.  While 
consumers,  reading  the  newspaper  advertisements  with  some 
notion  that  special  doings  were  afoot,  brought  a  touch  of  per- 
sonal interest  and  curiosity  to  the  matter  and  clinched  the 
whole  thing  by  demanding  and  buying  "Pee-Kay"  products. 
So  successful,  indeed,  was  the  campaign  that  it  will  be  repeated 
at  intervals  when  slack  seasons  in  well  exploited  territories 
release  salesmen  for  new  "flying  squadrons,"  to  work  backward 
fields. 

WHEN    MANUFACTURERS    APPEAL    TO    THE    CONSUMER 

Appeal  to  the  consumer  by  the  manufacturer,  in    order  to 

compel  the  jobber  to  be  more  active  in  pushing  the  goods  or 

Consumer  ^^  forestall  the  jobber  in  any  attempt  to  substitute 

Education  his  own  brands  for  the  manufacturer's  product,  is  the 

Private    "^^st  common  of  the  methods  of  getting  the  jobber 

Brand     into  line.     A  particularly  successful  case  of  this  kind 

rou  es   ^^^  ^^  experience  of  the  Hunt  Brothers  Co.,  of  San 

Francisco,  Cal.,  fruit  canners.     J.  H.  Hunt,  President  of  the 

company,  tells  the  story  as  follows : 

*We  entered  upon  our  campaign  to  consumers  only  a  little 
more  than  two  years  ago.  This  campaign  of  education  was 
necessary  because  of  the  fact  that  the  methods  of  canning  fruits 
in  this  state  were  such  as  to  require  some  strenuous  publicity 
to  let  the  public  know  how  they  might  procure  desirable  canned 
fruit  without  running  the  risk  of  being  disappointed  by  buying 
private  label  goods  which  were  invariably  recommended  and 
sold  as  the  best,  when,  as  a  matter  of  fact,  the  goods  were  of 
varying  qualities  —  from  fair  down  to  disgustingly  poor. 

We  knew  that  the  consuming  public  wanted  a  better  quality 
of  canned  fruits  and  felt  that  they  would  respond  if  they  could 
be  assured  of  getting  the  right  quality. 

The  first  year  of  our  campaign  was  very  slow  and  uphill 
work,  our  chief  difficulty  being  that  we  could  not  seem  to  get 
the  retail  distribution.  Our  goods  necessarily  were  higher 
in  price  to  the  trade  than  the  cheaply  packed  goods  that  were 

*  Printers'  Ink,  May  9,  1912,  p.  8. 


ADVERTISING  AND  THE  WHOLESALER       243 

so  freely  offered  and  in  such  general  distribution  throughout 
the  country  under  jobber's  private  label.  It  was  hard  to 
convince  retailers  that  they  could  afford  to  pay  a  little  more  for 
even  better  goods  that  must  retail  at  the  same  price  as  the 
brands  they  were  carrying. 

The  majority  of  jobbers  who  took  on  our  line  did  it  with 
apparent  intention  to  sidetrack  it  and  prevent  its  getting  into 
the  hands  of  a  competitor.  Instead  of  giving  us  the  support 
they  promised  and  gaining  for  us  retail  distribution,  most  of 
them  did  whatever  they  could  to  prevent  distribution,  appar- 
ently preferring  to  carry  the  goods  as  dead  stock  in  their 
warehouses  rather  than  permit  them  to  get  on  the  retailer's 
shelves. 

All  this  time  our  consumer  advertising  was  going  on  and  the 

constant  complaint  was  that  our  goods  could  not  be  found  in 

the  retail  stores. 

I  t^^h       ^^  then  concluded  to  send  out  our  own  specialty 

Consumer  M^n  to  work  the  retail  trade  along  with  the  salesmen 

of  the  jobbers  who  were  acting  as  our  distributors 

in  the  various  markets.     The  retailers  responded  quickly  and 

willingly,  and  we  were  agreeably  surprised  to  find  that  instead 

of  their  unwillingness  to  pay  the  difference  in  price,  they  were 

not  only  willing,  but  glad  to  do  so  once  they  were  shown  the 

difference  in  the  quality  of  the  goods. 

Our  success  during  the  past  year,  or  second  year  of  our 
campaign,  has  been  wonderfully  satisfactory  and  we  attribute 
it  to  the  educational  campaign  carried  on  with  consumers  and 
their  ready  response  as  soon  as  the  goods  began  to  make  their 
appearance  in  the  retail  stores. 

We  have  felt  the  need  of  some  kind  of  dealer  literature, 
but  our  appropriation  being  somewhat  small  for  a  national 
campaign,  and  being  so  very  green  in  the  business  of  adver- 
tising, we  have  gotten  along  with  only  our  consumer  advertising, 
coupled  with  the  work  of  our  specialty  men  with  the  dealers. 

I  might  say  that  our  only  idea  when  we  started  in  of  what 
advertising  might  accomplish  was  gained  through  our  con- 
nection with  the  advertising  of  Hawaiian  Pineapple,  which  was 
almost  entirely  consumer  advertising,  and,  like  our  fruit  cam- 
paign, one  of  education.  The  success  of  that  campaign  was 
so  remarkable  that  we  concluded  to  enter  upon  a  similar  cam- 
paign of  education  on  California  Canned  Fruits,  and  while, 
as  above  stated,  our  success  is  not  only  assured,  but  very 


244        ADVERTISING  AS  A  BUSINESS  FORCE 

satisfactory  at  the  present  time,  we  nevertheless  had  a  very 
different  situation  to  overcome,  viz.,  that  of  private  brand. 

The  merchandising  condition  which  our  advertising  was 
designed  to  overcome  was  simply  that  of  reaching  the  consumer 
with  an  honest,  good  quality,  making  it  almost  necessary 
to  break  down  the  barracks  of  the  private-brand  goods,  a  large 
majority  of  which  were  not  only  disappointing  in  quality,  but 
had  the  labels  claiming  the  goods  to  be  much  better  than  they 
actually  were. 

Our  experience  has  been  that  wherever  we  have  succeeded 
in  reaching  the  consumer  we  are  winning  out  handsomely, 
proving  conclusively  that  our  contentions  were  correct  that  the 
consumers  are  not  looking  for  cheaper  goods,  but  for  better  value. 

The  best  dealer  work  in  our  case  has  been,  while  expensive, 
the  opening  of  the  cans  and  showijig  the  dealer  the  comparative 
quality,  side  by  side  with  the  goods  he  was  carrying. 

ANOTHER  manufacturer's   APPEAL   TO    CONSUMERS 

Arthur  H.  Scott,  sales  manager  of  the  Scott  Paper  Company, 
of  Philadelphia,  is  convinced  that  consumer  advertising  is  a  final 
and  conclusive  answer  to  private-brand  control.  The  following 
case  shows  how  his  company  used  this  weapon.  It  has  some 
striking  points  of  contrast  with  either  the  Hunt  case  or  the 
General  Roofing  case  already  cited. 

*Just  because   a    manufacturer  has    been    making   private- 
brand  goods  for  a  number  of  years  is  no  reason  for  his  going 
on  sinking  his  identity  to  the  end  of  time.    I  grant 
The  Manu-  yQ^  that  the  apparent  title  to  the  goods,  as  far  as 
Chance  of  ^^^  public  is  concerned,  rests  with  the  jobber  who 
Escape    owns  the  brand.      I  grant  you  that  the  same  job- 
ber can  take  the  business  clean  away  from  that  man- 
ufacturer whenever  he  gets  ready  to  have  his  goods  made  by 
somebody  else.     I  grant  you  all  you  care  to  maintain  about 
the  wastefulness  of  manufacturing  a  line   of   goods,    putting 
your  thought  and  your  energy  into  them,  and  allowing  them 
to  go  to  the  consumer  under  somebody  else's  colors.     But  I 
maintain  that  it  isn't  necessary  to  keep  it  up  any  longer  than 
it  seems  profitable. 

*Printers'  Ink,  June  30,  1912,  p.  30. 


ADVERTISING  AND  THE  WHOLESALER       245 

Three  years  ago  this  company  was  manufacturing  approxi- 
mately three  hundred  different  articles,  representing  the 
accumulation  of  thirty  years  of  doing  business  through  the 
private-brand  jobbers.  Each  year  the  jobbers'  claims  grew 
more  insistent;  price  concessions,  more  elaborate  labels  and 
packages,  special  styles  were  demanded  in  ever-increasing 
ratio.  Not  one  of  the  jobbers  was  tied  to  us.  If  we  did  not 
accede  to  their  demands  they  would  buy  elsewhere  —  and 
the  expense  of  putting  up  four  or  five  varieties  of  a  product 
in  three  hundred  different  forms  was  getting  burdensome. 
We  made  up  our  minds  that,  if  it  were  possible  to  persuade 
the  consumer  to  ask  for  Scottissue  or  Sanitissue  when  paper 
towels  or  toilet  paper  were  wanted  we  could  easily  reduce  the 
number  of  styles  and  do  as  much  or  more  business.  As  a 
matter  of  fact  where  we  were  handling  three  hundred  articles 
we  are  now  handling  only  five,  and  one  year  after  we  made  the 
change  our  business  had  increased  40  per  cent. 

Of  course,  right  at  the  start,  the  cutting  off  of  the  private- 
brand  trade  represented  a  big  saving  at  the  production  end 
of  the  business  but  from  the  selling  end  it  looked  shaky. 
Direct  Sale  j^.  n^gaj^i^  cutting  out  the  jobber  entirely,  and  selling 
Necessary  direct  to  the  dealers  ourselves.  The  jobbers  who  had 
built  up  a  fancy  trade  in  private-brand  toilet  paper, 
fixing  the  prices  to  suit  themselves,  were  hardly  to  be  expected 
to  push  the  same  paper  under  a  manufacturer's  trade-mark  with 
the  price  advertised  to  the  consumer.  And  there  wasn't  any 
use  of  continuing  the  private-brand  papers  and  trying  to  market 
our  own  trade-marked  papers  besides.  So  the  jobber  had  to  go. 
We  made  up  our  minds  that  we  would  sell  direct  to  the  retail 
trade,  and  push  the  product  off  the  dealer's  shelves  by  adver- 
tising to  the  consumer. 

Toilet  paper  is  an  article  in  which  competition  in  price  is 
remarkably  keen,  and  there  were  plenty  of  other  papers  which 
were  quite  satisfactory.  Therefore  it  was  necessary  to  make 
something  else  the  leader,  create  an  "atmosphere"  which  would 
lead  people  to  prefer  Scott  products,  and  let  the  product  come 
in  sort  of  incidentally. 

The  sort  of  atmosphere  to  be  created  came  in  for  the  hardest 
thought.  We  made  up  our  minds  to  feature  the  Scottissue 
towel  as  the  leader. 

Just  about  that  time  there  was  a  lot  of  talk  going  around, 
in  the  advertising  columns  and  elsewhere,  about  "sanitation." 


246        ADVERTISING  AS  A  BUSINESS  FORCE 

Some  concerns  selling  through  the  drug  stores  were  harping 
a  good  deal  upon  the  antiseptic  properties  of  their  goods. 
We  believed  that  there  was  considerable  interest  stirred  up 
in  sanitation,  but  we  thought  that  where  there  was  one  person 
interested  in  sanitation  there  were  a  dozen  interested  in  plain, 
every-day  cleanliness. 

Then,  too,  the  arguments  for  goods  as  being  sanitary  or 
antiseptic  tend  to  arouse  prejudice  on  the  part  of  the  medical 
profession,  because  comparatively  few  products  are  really 
antiseptic  as  sold  in  the  average  drug  store.  Every  surgeon 
knows  how  necessary  it  is  to  guard  against  dust,  for  example, 
if  articles  are  to  be  kept  in  a  sterUe  condition.  So  the  adver- 
tising of  goods  with  those  precise  terms  is  likely  to  give  rise 
to  an  impression  of  false  claims,  while  to  say  that  the  goods 
are  clean  can  offend  no  one. 

It  was  this  semi-professional  atmosphere  which  we  endeav- 
ored to  get  —  to  surround  the  goods  of  our  manufacture  with 
the  atmosphere  of  healthful  cleanliness. 

Getting  '^Yg  made  a  good  deal  of  the  various  uses  of  the 
Pro/Sowa/P^P^^  towel,  such  as  for  shaving,  for  polishing  win- 
Atmosphere  dows,  for  removing  superfluous  fat  from  foods  cooked 
in  grease,  removing  moisture  from  photographic 
prints,  etc.  In  each  connection  the  cleanliness  of  the  towel 
was  emphasized,  and  we  were  careful  to  include  the  statement 
that  the  towels  were  snow-white. 

We  have  used  comparatively  small  space  in  the  magazines 
in  the  belief  that  small  space  in  many  mediums  would  pay 
us  better  than  large  space  in  a  few.  Towels  and  toilet  paper 
are  articles  which  everybody  uses  everj^  day,  but  they  are  not 
of  supreme  importance.  Hence  it  seemed  in  better  taste,  and 
in  line  with  the  atmospheric  appeal  we  were  trying  to  make, 
to  keep  the  advertising  down  where  it  would  not  be  too  con- 
spicuous, yet  would  be  seen. 

Each  year,  during  the  automobile  season,  we  have  carried  on 

a   sort   of   sampling  campaign,  though   the  samples   are   not 

always   free.     We   prepare  "tourist  packages"  con- 

Samvlina  Gaining  six   paper  towels,  a  paper  comb,  a  drinking 

cup,  a  cake  of  soap,  and  a  washcloth.     The  latter  is 

separately  wrapped  in  an  envelope  which  carries  an  advertising 

message  —  which  is  not  out  of  place  as  it  would  be  in  a  maga- 

azine  page.     These  tourist  packages  are  distributed  through 

the  local  dealer,  who  buys  them  at  cost  to  us.     Sometimes  he 


ADVERTISING  AND  THE  WHOLESALER       247 

distributes  them  without  charge;  sometimes  he  gets  a  nominal 
price  for  them  —  depending  upon  the  recipient  in  some  cases. 
These  sample  packages  are  intended  for  use  at  country  hotels 
where  toilet  facilities  are  often  inadequate.  They  have  been 
of  great  value  in  getting  people  to  ask  for  our  goods. 

In  each  regular  package  of  goods  which  we  put  out  we  include 
a  little  booklet  in  the  form  of  a  novelette,  which  sums  up  the 
various  uses  of  the  product,  and  carries  the  sanitary  argument 
a  little  further  than  can  be  done  in  magazine  space.  The  last 
few  pages  in  the  book  are  devoted  to  advertisements  of  the 
various  lines,  together  with  an  offer  of  the  tourist  packages 
in  quantity  for  automobilists.  Some  opinions  of  physicians 
regarding  the  germ-carrying  properties  of  common  fabric 
towels  are  included. 

When  we  discontinued  selling  through  jobbers  we  divided 
the  country  into  thirty  sections.  Each  section  is  the  head- 
quarters of  a  salesman,  and  also  a  distributing  point 
When  the  for  the  goods.     We  have  trained  our  sales  force  to 

We7e^  talk  the  goods  to  a  dealer  as  if  they  were  selling  speci- 
Abandojied  alties  to  consumers.  Each  salesman  is  filled  so  full 
of  the  arguments  for  the  use  of  our  products  that  he 
cannot  help  enthusing  the  dealer.  Once  a  year  we  have  a 
salesmen's  convention  at  the  factory,  and  the  men  are  thor- 
oughly posted  on  the  advertising  plans,  together  with  every 
new  sales  argument. 

The  results  in  two  j'ears  have  exceeded  our  expectations. 
The  first  year  showed  a  gain  of  40  per  cent.,  and  we  have  been 
going  steadily  on  ever  since. 

So  the  private-brand  situation  is  not  hopeless  by  a  long  ways. 
Of  course  the  cost  of  doing  business  is  somewhat  higher  when 
it  is  necessary  to  maintain  one's  distributing  points  —  I  am 
speaking  of  the  average  manufacturer  —  and  it  is  necessary  to 
spend  a  good  deal  more  time  and  energy  training  a  sales  force 
large  enough  and  competent  enough  to  represent  the  goods. 
But  much  of  this  is  offset  by  the  added  enthusiasm  which  the 
dealer  gains  through  contact  with  a  man  who  is  interested  in 
the  particular  line  of  goods  —  not,  like  the  jobber's  salesman, 
spreading  his  interest  thin  over  a  multitude  of  things. 

And  later  on,  if  the  business  grows  to  such  a  volume  that 
it  is  no  longer  possible  to  handle  one's  distribution  in  this  way, 
the  jobbers  will  welcome  the  line  with  open  arms.  A  big, 
going  business,  with  the  retailers  in  their  territories  demanding 


248        ADVERTISING  AS  A  BUSINESS  FORCE 

the  goods,  is  worth  paying  attention  to,  and  no  jobber  worthy 
of  the  name  is  going  to  cut  off  his  nose  to  spite  his  face. 


A    MANTTFACTURER    WHO    DEFENDS    THE    JOBBER 

Amid  all  the  quarreling  with  the  jobber  it  is  refreshing  to  find 
now  and  then  a  producer  who  really  uses  the  jobber  to  per- 
One  Mann-  ^o^m  his  proper  function  and  treats  him  accordingly. 
facturer    The  Kellogg  Toasted  Corn  Flake  Company  is  the 
Believes    classic  instance  of  a  grocery  specialty  manufacturer 
in  the     who  insists  that  the  jobber  still  performs  a  service 
°   ^^     and  that  he  is  worthy  of  his  hire.     Andrew  Ross,  the 
vice-president   and  sales  manager  of  this  company,  delivered 
an  address  before  the  Central  Division  of  the  Associated  Adver- 
tising Clubs  of  America,  in  Toledo,  on  June  14,  1912.     From 
this  address  the  following  paragraphs  are  taken: 

*Our  company  has  very  pronounced  ideas  of  what  constitutes 
a  square  deal  to  the  grocery  trade,  with  which  it  is  closely 
identified.  There  are  those  who  differ  with  us.  I  could  name 
the  representatives  of  half  a  dozen  of  the  biggest  interests  in 
the  trade  who  would  seriously  assert  that  we  don't  begin  to 
know  what  a  square  deal  means,  let  alone  knowing  enough  to 
talk  about  it.  The  only  consolation  is  that  these  men  are 
greatly  outvoted. 

It  seems  peculiar  that  the  square  deal  in  business  should 
strike  men  as  a  peculiar  policy,  and  yet  such  actually  seems  to 
be  the  case.  As  far  as  I  can  learn  it  always  has  been  the  case. 
When  we  adopted  the  policies  which  now  control  the  business 
of  our  company  and  decided  to  submit  every  business  problem 
to  the  square-deal  test  and  to  hew  closely  to  the  line,  the  plan 
was  derided  as  being  impractical  and  visionary;  but  we  are 
getting  away  with  it,  and  with  this  policy  firmly  established  in 
every  feature  of  our  business  we  have  built  up  as  substantial 
an  institution  as  any  man's  heart  could  desire. 

Our  conception  of  the  square  deal  is  this:  That  our  first 
and  most  vital  purpose  is  to  give  to  the  consumer,  the  people 
for  whom  we  make  the  goods,  the  best  food  we  can  produce, 

*Pnnters  Ink,  July  18,  1912,  p.  120. 


ADVERTISING  AND  THE  WHOLESALER       249 

at  the  smallest  price  we  can  profitably  accept.  That  the  jobber 
and  retailer,  who  distribute  our  goods  to  the  consumer,  must 
be  paid  an  equitable  price  for  their  services,  and  that  every 
jobber  is  entitled  to  the  same  treatment  as  every  other  jobber 
and  every  retailer  to  the  same  consideration  as  every  other 
retailer.  This  does  not  seem  to  be  a  peculiar  doctrine,  but 
it  is,  and  it  has  cost  us  a  peck  of  trouble  to  establish  it.  ... 
I  can  say  frankly  that  I  consider  the  national  advertising 
is  one  of  the  greatest  of  all  influences,  if  not  the  greatest,  in  the 
development  and  encouragement  of  the  square  deal  in  business. 
There  are  several  reasons  for  this.  In  the  first  place,  national 
advertising  has  bridged  the  chasm  which  has  existed  in  the 
years  past  between  the  manufacturer  and  the  consumer.  The 
manufacturer  now  meets  his  customer  face  to  face  and  talks 
to  him,  becomes  intimately  acquainted  with  him,  studies  his 
needs  and  requirements,  and  values  above  all  things  his  friend- 
ship and  confidence.  He  knows  that  this  confidence  is  his 
greatest  asset.  Without  it  his  advertising  would  soon  become 
unprofitable  and  his  business  would  fail.  He  must  give  the 
consumer  all  he  has  a  right  to  require.  More  than  that,  he 
must  even  measure  up  to  the  consumer's  fondest  expectations, 
and  to  do  this  he  must  watch  closely  the  two  main  points  of 
his  business  —  production  and  distribution.  He  must  employ 
the  best  attainable  products,  the  most  skilled  workmen  and 
the  most  modern  and  perfect  processes.  In  short,  he  must 
do  everything  possible  to  make  a  product  which  cannot  fail 
to  satisfy  the  customer. 

Problems  of  distribution  vary  with  different  businesses. 
In  the  grocery  business  there  are  some  350,000  retailers  and 
there  are  some  2,500  jobbers.  No  manufacturer,  it  may  be 
safely  said,  can  profitably  deal  with  the  350,000  retailers  in 
the  grocery  trade  direct.  The  administration  expense  of 
carrying  this  terrific  number  of  accounts  on  his  books,  the  loss 
in  bad  debts  and  the  cost  of  the  army  of  salesmen  and  collectors 
that  would  be  required  would  treble  or  quadruple  his  cost  of 
doing  business  and  add  consequently  to  the  burden  of  the 

consumer. 
Gi^'i^g  the      J  don't  know  how  it  may  be  in  other  lines,  but  in 
"%uare   ^^^  grocery  trade  this  talk  of  eliminating  the  jobber 
Deal"    is  all  plain  rot.     There  is  considerable  talk  in   the 

trade  of  what  is  called  the  "trinity  of  trade,"  the 
manufacturer-to-jobber-to-retailer  chain  of  distribution.      We 


250        ADVERTISING  AS  A  BUSINESS  FORCE 

believe  in  it,  and  we  believe  in  the  jobber  and  the  retailer 
as  distributors;  and  because  we  believe  in  the  jobber  we  do 
not  sell  our  goods  over  his  head  to  preferred  retailers.  We 
need  him  as  a  distributor  and  so  we  give  him  all  our  distri- 
bution —  100  per  cent,  of  it.  There  are  a  great  many  retail 
stores,  particularly  chain  stores,  in  the  country,  to  which  we 
could  profitably  sell  direct.  I  use  the  word  "profitably"  in 
a  limited  sense.  But  when  the  manufacturer  has  sold  every 
one  of  these  big  stores  direct  he  will  find  that  90  per  cent, 
of  his  distribution  is  still  through  jobbers  to  the  great  army 
of  small  retailers.  We  don't  believe  in  depending  on  the  job- 
bers for  90  per  cent,  of  our  distribution  and  then  taking 
10  per  cent,  of  their  very  best  trade  away  from  them.  One 
cardinal  point  of  our  conception  of  a  square  deal  in  the 
grocery  trade,  then,  is  100  per  cent,  distribution  through 
jobbers. 

But  this  thing  of  the  square  deal  is  not  a  jug-handled  affair. 
There  are  two  sides  to  it.  If  the  jobber  wants  us  to  play  fair 
with  him  we  have  a  right  to  expect  that  he  shall  play  fair  with 
us.  If  he  asks  the  manufacturer  of  a  trade-marked,  adver- 
tised brand  to  entrust  100  per  cent,  of  the  distribution  to 
him  the  manufacturer  of  that  trade-marked,  advertised  brand 
has  the  right  to  expect  that  the  jobber  will  entrust  100  per 
cent,  of  the  manufacturing  of  that  trade-marked  brand  to 
him.  We  have  no  quarrel  with  honest,  straightforward 
competition  with  other  manufacturers,  but  when  the  jobber 
goes  into  the  business  of  distributing  his  own  private  brand 
of  corn  flakes,  thus  competing  with  the  very  interest  which 
economically  he  is  supposed  to  serve,  then  we  certainly  have  a 
right  to  a  loud  and  sustained  protest. 

We  have  made  that  protest.  We  have  made  it  very  vigor- 
ously and  we  have  gotten  by  with  it.  We  do  not  sell  a  single 
case  of  Kellogg's  Toasted  Corn  Flakes  to  any  jobber  marketing 
a  private  brand  of  corn  flakes.  There  are  just  an  even  dozen 
of  them  off  our  books.  Some  of  them  are  the  biggest  jobbers 
in  the  United  States.  We  miss  their  business  and  we  hope 
they  miss  ours,  but  in  spite  of  it  all  we  have  to-day  what  we 
consider  virtually  a  perfect  distribution  and  we  are  getting  and 
giving  a  square  deal. 

We  believe  in  treating  every  jobber  or  every  retailer  exactly 
alike,  and  accordingly  every  jobber  pays  the  same  price  and 
makes  the  same  profit  on  our  goods  as  does  every  other  jobber. 


ADVERTISING  AND  THE  WHOLESALER       251 

The  same  is  true  in  the  retail  trade.  We  beheve  in  equal 
rights  to  all  and  special  privileges  to  none  and  have  in  our 
business  no  free  deals,  no  quantity  prices,  no  rebates. 
^'■^  p^-^'^j  Free  deals  and  rebates  are  illegal  in  the  railroad  busi- 
°'\rices  "^^^^  ^^^  people  get  arrested  for  giving  them  if  they 
are  found  out.  I  believe  they  are  just  as  great  an 
evil  in  any  other  line  of  business,  only  they  haven't  been 
legislated  against.  The  free  deal  is  solely  a  loading  device. 
Its  one  purpose  is  to  load  up  the  dealer  with  as  large  an  order 
as  the  traffic  will  stand.  With  a  perishable  product,  such  as 
a  flake  food,  it  seems  to  us  that  even  if  the  free  deal  were  not 
wrong  in  principle  it  would  be  a  peculiarly  fatal  policy  to  adopt. 
We  bend  every  effort  in  our  business  toward  procuring  the  most 
normal  distribution  and  avoiding  any  overstock.  To  this 
end  we  have  no  storage  at  our  factory.  Every  case  of  goods 
we  make  goes  direct  into  the  cars.  We  consider  it  vital  to  our 
interests  to  get  our  goods  into  the  hands  of  the  consumer  in 
the  shortest  possible  space  of  time.  Think,  then,  of  the  effect 
of  a  merchandising  practice  the  sole  purpose  of  which  is  to  load 
up  the  retailer  with  as  many  goods  as  he  can  be  induced  to  buy 
—  goods  which  must  stand  on  his  shelves  for  weeks  and  months 
before  they  are  disposed  of,  if  in  fact  they  are  ever  sold  at  all. 

The  free  deal  or  the  quantity  price  places  a  vast  advantage 
in  the  hands  of  the  bi^  store  with  increased  buying  power  over 
its  small  competitor.  In  this  way  it  is  a  builder  of  monopolies 
and  an  enemy  of  the  small  dealer.  It  is  an  encouragement  for 
price  cutting  and  invariably  has  a  demoralizing  influence. 

We  consider  that  it  is  not  only  the  right  but  the  duty  of  the 
manufacturer  of  an  advertised,  trade-marked  article  to  protect 
the  selling  price  of  his  goods.  He  is  responsible  for  attending 
to  the  best  possible  distribution  of  his  product  to  the  consumer. 
His  distributors,  the  wholesale  and  retail  merchants,  cannot 
be  expected  to  give  his  product  the  attention  which  it  should 
receive  unless  they  are  fairly  paid  for  their  services.  With 
a  non-protected  price  article  price  cutting  is  inevitable;  and, 
price  cutting  being  contagious,  a  sudden  epidemic  of  it  is  likely 
to  be  fatal  to  almost  any  business.  And  when  the  business 
of  manufacturing  and  distributing  a  desirable  article  succumbs 
to  it,  the  manufacturer,  the  dealer,  and  the  consumer  are  all 
losers. 

These  are  only  a  few  of  the  cardinal  points  of  the  square  deal 
in  merchandising,  as  we  see  it.     It  spells  better  service  for  the 


252       ADVERTISING  AS  A  BUSINESS  FORCE 

consumer  and  It  means  the  salvation  of  the  small  dealer  — 
the  little  store  on  the  corner.     .     .     . 

THE    JOBBER    AND    PRICE    MAINTENANCE 

As  suggested  in   this  account  of  the  policy  of  the  Kellogg 
Toasted  Corn  Flake  Company,  we  find  that  the  problem  of  get- 
ting the  jobber  to  maintain  prices  is  one  of  the  most 
Mainten-  serious  troubles  in  the  whole  distribution  system.    The 

ance^  and  following  exccrpts  from  letters  received  by  a  producer 
the  Jobber      ■•  j     i.      ^    ±.  j.i  ••  i-  •  'i 

who  undertook  to  secure  the  opmion  oi  various  job- 
bers in  the  hardware  trade  on  the  question  of  price  mainte- 
nance suggest  the  main  features  of  this  problem  in  the  jobber's 
work  and  relations: 

*We  suppose  that  the  jobber  has  as  many  friends  as  anybody 
else;  otherwise  he  would  not  be  able  to  stay  in  business  and 
prosper. 

Neither  the  jobber  nor  his  friends,  however,  seem  particularly 
anxious  to  rush  into  print  in  his  defence  when  he  is  assailed; 
consequently  we  hear  all  sorts  of  things  about  the  wickedness 
and  uselessness  of  the  jobber  without  hearing  much  of  the 
other  side  of  the  case. 

The  jobber  is  regularly  accused  of  pretty  nearly  everything 
from  the  high  cost  of  living  to  bad  crops  and  an  unusually  hard 
winter,  and  every  few  weeks  somebody  jumps  into  the  ring 
with  the  proposition  that  all  jobbers  be  eliminated. 

In  business  nothing  can  persist  indefinitely  unless  it  fills 
a  useful  purpose  and  does  its  work  well;  hence  the  fact  that 
the  jobber  increases  and  flourishes  in  the  land  is  scientific 
evidence,  at  least,  of  the  fact  that  he  is  needed. 

Jobbers  are  accused,  among  other  crimes,  of  failing  to  keep 
their  promises  in  the  matter  of  price  maintenance  and  cutting 
prices  recklessly  whenever  they  see  fit. 

There  has  recently  come  to  our  attention  the  result  of  one 
investigation  as  to  price  cutting  by  jobbers  which  is  interesting 
and  which  may  be  typical. 

John  Simmons  Company,  of  New  York  City,  are  manufac- 
turers of  the  Baldwin  Acetylene  Lamp,  a  lamp  for  miners, 

*Advertising  and  Selling,  May,  1912,  p.  140. 


ADVERTISING  AND  THE  WHOLESALER       253 

engineers,  etc.  These  lamps  are  handled  by  jobbers  in  all 
parts  of  the  country,  and  the  following  letter  recently  sent 
out  by  the  Simmons  Company  explains  the  situation  with  which 
they  found  themselves  confronted : 

Ever  since  the  jobbers  have  been  handhng  the  Baldwin  Lamp  we  have 
insisted  on  the  maintenance  of  the  resale  discount  of  25  per  cent.,  but  every 
few  months  an  epidemic  of  price  cutting  breaks  out,  first  in  one  section  and 
then  in  another.  Sometimes  it  will  break  out  in  the  same  section  two  or  three 
times,  until  the  conclusion  has  been  forced  upon  us  that  the  jobbers  are  satisfied 
with  a  smaller  profit  than  we  supposed  they  needed  in  order  to  successfully 
carry  on  a  profitable  business. 

We  find  that  some  of  the  jobbers  are  satisfied  to  take  orders  for,  say,  half  a 
gross  or  more  at  $8.50  a  dozen,  and  it  occurs  to  us  that  it  might  be  advisable 
to  rearrange  the  resale  prices  on  the  No.  31,  32  and  33  lamps  to  $9  a  dozen 
on  less  than  half  gross  and  $8.50  on  half  groes  or  over.  Of  course,  there  would 
be  no  change  in  our  jobbing  prices  for  the  very  good  reason  that  we  cannot 
afford  to  reduce  our  prices  and  still  continue  our  advertising,  and  if  we  did 
lower  prices  it  would  only  result  in  further  cutting  by  some  jobbers. 

If  the  jobbing  trade  are  satisfied  with  that  profit  on  half  gross  orders,  we 
do  not  see  why  we  should  object  to  their  giving  the  difference  to  their  customer, 
but  unless  it  is  the  concensus  of  opinion  of  the  jobbing  trade  that  the  $8.50 
price  would  be  satisfactory,  we  propose  to  hold  to  the  present  resale  price  of 
$9,  and,  in  order  to  fulfil  our  promise  to  maintain  that  price,  we  will  be 
compelled  to  withdraw  the  jobbers'  discount  from  the  jobbers  who  persist 
in  cutting  prices. 

We  dislike  having  to  take  such  an  arbitrary  stand  in  the  matter,  but  it 
seems  that  some  jobbers  will  persist  in  selling  goods  without  carefully  analyzing 
their  cost  of  doing  business. 

Kindly  let  us  have  your  views  on  the  advisability  of  a  revision  of  the  resale 
price. 

Yours  very  truly, 

John  Simmons  Co. 

Replies  from  over  four  fifths  of  the  jobbers  to  whom  this 
letter  was  sent  were  received  promptly.  They  were  practically 
unanimous  in  their  objection  to  the  change  in  price  suggested 
in  the  letter  from  the  Simmons  Company  to  them,  and  in  their 
denial  of  having  cut  prices  or  being  in  favor  of  that  practice. 

These  responses  developed  the  interesting  fact  that  the 
price  cutting  of  which  the  Simmons  Company  complained 
was  evidently  due  to  false  rumors  started  by  so-called  shrewd 
buyers.  The  way  it  worked  out  was  this:  When  one  jobber's 
representative  called  upon  one  of  the  "shrewd"  buyers  and 
offered  Baldwin's  lamps  at  the  usual  price,  he  was  informed 
that  they  had  been  offered  by  another  jobber  at  a  lower  price. 

This  statement  was  false  but  was  accepted  at  its  face  value 
and  duly  reported  back  to  the  jobber  by  the  traveler.      Natu- 


254        ADVERTISING  AS  A  BUSINESS  FORCE 

rally  the  jobber  said  that  if  his  competitors  were  offering  these 
lamps  at  the  stated  cut  price,  that  price  would  have  to  be  met, 
and  in  this  manner  these  little  epidemics  of  price  cutting  bobbed 
up  from  time  to  time  and  in  various  places,  much  to  the  annoy- 
ance and  discomfort  of  the  John  Simmons  Company. 

It  is  highly  probable  that  this  situation  often  develops  in 
other  lines  of  trade. 

There  is  no  way  to  prevent  a  liar  from  lying,  but  the  pro- 
tection of  the  jobber  and  of  the  manufacturer  whose  goods 
he  carries  seems  to  make  it  imperative  that  instances  of  price 
cutting  be  traced  as  soon  as  they  are  discovered,  and  that 
the  real  cause  of  the  cuts  be  made  known  and  the  practice 
stopped. 

Some  of  the  responses  received  by  the  Simmons  Company 
are  quite  interesting.  We  give  below  extracts  from  a  few  of 
the  large  number  which  we  have  been  permitted  to  examine: 

From  a  Western  jobber,  Chicago : 

In  our  own  experience  we  are  almost  con\-inced  that  most  of  the  price  cutting 
brought  to  our  attention  was  due  to  shrewd  buying  on  the  part  of  the  merchant, 
or,  possibly  even  to  misrepresentation. 

From  Strevell-Paterson  Hardware  Company,  Salt  Lake  City : 

As  you  know,  we  have  WTitten  you  several  times  in  reference  to  prices 
being  made  our  customers  at  less  than  $9.  We  have  never  been  able  to 
find  out  just  how  low  this  price  has  been,  but  we  know  it  is  at  least  $8.50, 
and  it  is  a  question  whether  it  is  not  lower  than  that.  We  have  absolutely 
refused,  up  to  the  present  time,  to  make  any  better  price  than  $9.  The 
result  has  been  that  our  business  has  been  dropping  off  very  noticeably  on 
Baldwin  lamps.  It  is  now  a  question  of  what  we  had  better  do  regarding  thi^ 
as  this  trade  should  belong  to  Salt  Lake  and  we  naturally  are  anxious  for  it. 

From  Wolff-Lane  Hardware  Company,  Pittsburgh : 

There  is  one  thing  sure,  and  that  is  if  you  deviate  from  your  present  estab- 
lished prices  and  give  us  the  pri\Tilege  of  selling  these  lamps  at  $8.50  in  six 
dozen  lots,  it  simply  means  that  some  one  will  go  out  and  sell  them  at  $8.50 
in  dozen  lots.  As  long  as  some  of  the  jobbers  will  use  your  lamp  as  a  vehicle 
for  getting  other  business,  just  so  long  will  these  cut  prices  be  cast  around. 

We  have  found  one  very  good  way  of  meeting  this  question  of  cutting  prices 
and  that  is,  when  any  of  oiu*  men  report  to  us  that  their  customers  can  buy 
Baldwin  lamps  at  less  than  $9,  we  ask  them  to  ascertain  who  is  selling  them 
at  less  than  $9,  but  we  have  ne\-er  yet  lieen  able  t(;  find  any  tangible  cvidente 
of  this  having  l>een  done. 


ADVERTISING  AND  THE  WHOLESALER       ^255 

From  C.  H.  Miller  Hardware  Company,  Huntingdon,  Pa. : 

We  do  not  think  that  $9  per  dozen  is  too  high  a  price,  but  the  price  has  not 
been  maintained. 

If  yon  can  adopt  some  way  by  which  you  can  hold  the  jobbers  to  the  price 
of  $9  we  think  it  would  be  very  much  indeed  to  your  advantage,  and  you  can 
depend  upon  our  hearty  co-operation. 

Kane  &  Keyser  Hardware  Company,  Belington,  W.  Va.  : 

Past  experience  would  lead  us  to  believe  that  if  you  permitted  jobbers 
to  make  price  of  $8.50  per  dozen  on  six  dozen  lots  or  more,  that  they  would 
take  on  a  customer  who  would  for  one  time  buy  six  dozen  in  order  to  get  this 
price;  then  perhaps  he  might  persuade  his  jobber  to  sell  him  smaller  lots  at 
the  same  price,  and,  if  this  jobber  refused  to  do  so,  perhaps  he  would  tell  some 
other  jobber's  salesman  that  he  was  buying  from  Mr.  A.  at  $8.50  per  dozen, 
and  he  would  expect  the  same  price  from  any  one  else;  so  that  the  price  would 
be  kept  down  to  $8.50  per  dozen. 

From  Simmons  Hardware  Company,  St.  Louis : 

We  are  unable  to  conceive  the  idea  of  a  jobber  who  is  willing  to  sell  Miners' 
Lamps  at  $8.50  based  on  the  costs  that  you  charge  us.  This  company  is  not 
willing  to  sell  the  goods  at  $8.50  based  on  the  present  cost  and  request  that 
you  maintain  the  price  of  $9,  and  see  that  the  other  jobbers  maintain  it. 

House-Hasson  Hardware  Company,  Knoxville,  Tenn. : 

We  find  that  the  great  trouble  resulting  from  resale  prices  is  that  the  manu- 
facturer will  allow  some  two  or  three  jobbers  to  cut  the  price,  still  trying  to 
have  the  smaller  jobbers  maintain  it.  We  would  suggest  that  instead  of 
yom-  reducing  your  resale  price  to  $8.50  per  dozen  that  the  parties  who  have 
been  guilty  of  selling  lamps  for  less  than  $9  per  dozen,  that  you  advance 
your  price  to  them  to  $8.50  F.  O.  B.  factory,  and  if  they  continue  to  sell  at 
$8.50  from  stock  would  suggest  that  you  charge  them  $9.50. 

We  think  if  you  would  ask  the  Colts  Pat.  Fire  Arms  Mfg.  Company  regarding 
restricted  or  resale  prices  that  they  would  advise  you  that  there  is  only  one 
way  to  have  these  maintained,  and  that  is  when  any  jobber  violates  it  to  dis- 
continue selling  him.  While  we  are  now  handling  several  lines  which  are 
sold  on  resale  price,  but  we  must  say  that  we  find  the  Colts  Pat.  Fire  Arms 
people  about  the  only  concern  we  know  of  that  are  having  the  resale  prices 
maintained,  we  could  mention  several  manufacturers  who  pretend  to  have 
resale  price  but  it  is  all  a  joke,  as  they  allow  some  of  the  largest  jobbers  to 
do  just  as  they  please. 

REVIEW  QUESTIONS  —  CHAPTER   VIII 

1.  What  changes  in  distribution  are  causing  a  reorganization 
of  the  wholesale  trades? 

2.  W'hy  is  the  wholesaler  so  often  on  the  defensive? 


^56        ADVERTISING  AS  A  BUSINESS  FORCE 

3.  What  are  the  three  main  methods  of  distribution  for 
retail  goods? 

4.  How  does  direct  buying  by  retailers  affect  the  manufac- 
turer? 

5.  How  does  Mr.  Wilson  say  the  cost  of  direct  selling  com- 
pares with  the  cost  of  selling  through  the  jobber? 

6.  How  did  the  General  Roofing  Company  reclaim  its  trade 
from  private-brand  control? 

PROBLEM   QUESTIONS CHAPTER   VIII 

1.  T\Tiat  measures  has  the  jobber  adopted  in  defence  of  his 
existence?  Was  he  justified  from:  (1)  His  own  standpoint, 
(2)  The  manufacturer's  point  of  view,  (3)  The  standpoint  of 
the  final  consumer? 

2.  What  are  the  main  arguments  for  and  against  the  "private 
brand"?  As  a  consumer  have  you  any  preference  for  a  manu- 
facturer's brand  as  against  a  jobber's?  Granting  equality  of 
product  would  you  prefer  Armour's  bouillon  cubes,  or  "Steero"? 

3.  Mr.  Roth  in  his  letter  declares  that  all  will  be  well  if  the 
manufacturers  and  private  branders  will  "play  fair  with  each 
other."     What  does  this  involve?     Is  it  possible? 

4.  Would  the  General  Roofing  Company's  plan  apply  in 
the  case  of  a  fruit  canner? 


CHAPTER  IX 

THE   MANUFACTURER   AND    HIS   ADVERTISING   PROBLEMS 

THE  theme  about  which  this  compilation  of  experience 
records  has  been  made  is  the  interrelation  between 
advertising  and  distribution.  Step  by  step  we  have  at- 
tempted to  show  by  illustrations  some  of  the  ways  in  which  the 
consumer  and  the  various  parts  of  the  distribution  system  have 
been  affected  by  the  achievement  of  various  advertisers. 

We  now  come  to  the  most  complicated  group  of  problems 
in  the  whole  series  —  the  problems  of  the  producer  of  the 
goods.  In  many  cases,  in  fact  in  all  cases  where  the  maker's 
identity  is  not  lost,  the  producer  is  the  originator  of  the  adver- 
tising activity,  if  it  is  at  all  wide  in  scope.  And  in  this  case 
he  necessarily  remains  at  the  centre  of  the  advertising  plan 
throughout  its  execution.  But  whether  the  advertising  origi- 
nates with  him  or  with  some  factor  in  the  distribution  system 
lying  between  him  and  the  consumer  (as  in  the  case  of  private 
brands  previously  discussed)  his  problems  are  affected  by  it 
and  must  be  adjusted  to  it. 

The  manufacturer  who  controls  his  distribution  has  three 
separate  fields  of  activity:  buying  his  raw  materials,  manufac- 
turing his  product,  and  selling  the  goods  which  he  produces. 
If,  therefore,  we  accept  advertising  as  one  of  the  most  powerful 
factors  for  influencing  the  size  and  kind  of  consumption,  it 
obviously  has  a  direct  bearing  on  all  three  of  these  branches 
of  the  manufacturer's  activity. 

RELATION    OF   ADVERTISING   TO    PRODUCTION   PROBLEMS 

Looking  over  the  list  of  really  successful  manufacturers' 
campaigns,  we  find  that  it  is  coming  to  be  more  and  more 

257 


258        ADVERTISING  AS  A  BUSINESS  FORCE 

generally  recognized  that  advertising  plans  yield  most  satis- 
factory returns  when  they  are  drawn  up  with  a  clear  conception 
of  their  place  as  an  integral  part  of  the  manufacturer's  entire 
policy  and  are  not  made  merely  an  adjunct  of  the  distribution 
efforts.  In  other  words,  the  great  campaigns  are  those  in  which 
advertising  has  been  considered  in  its  relations  to  the  product, 
the  market,  and  the  distribution  system. 

The  following  cases,  described  by  Lynn  G.  Wright,  Managing 
Editor  of  Printers'  Ink,  make  clear  the  interrelation  between 
advertising  and  production  problems. 

J.  M.   Brock,   sales  manager  of  the  William   Crane  Com- 

Adjvsting    pany,  of  New  York,  makers  of  gas  burners  and  gas 

Sales  and    supplies  of  various  kinds,  voiced  the  sentiment  of 

Production  others  when  he  said  that  the  problem  of  adjusting 

sales  to  factory  capacity  was  very  serious. 

"When  the  factory  begins  to  fall  behind  I  lose  the  value  of 
my  men,  who  are  kept  at  home.  I  lose  the  value  of  my  adver- 
tising. I  purposely  write  advertising  so  as  not  to  pull  inquiries, 
and  unavoidably  one  becomes  listless  in  following  up  inquiries. 
I  thus  lose  some  of  the  good-will  of  dealers  whose  orders  cannot 
be  filled  even  within  three  months." 

Mr.  Brock  believes  that  there  never  can  be  an  exact  adjust- 
ment of  selling  efforts  to  factory  production.  It  is  possible 
only  approximately  to  make  the  estimates  of  factory  production 
jibe  with  the  estimates  of  sales.  The  factory  superintendent 
naturally  desires  to  get  the  most  possible  out  of  his  force  and 
inevitably  tends  to  push  production.  Selling  what  he  makes 
is  a  function  which  belongs  to  another  world.  Similarly,  the 
sales  manager,  with  a  full  corps  of  salesmen  and  with  a  heavy 
appropriation  for  advertising,  goes  the  farthest  possible  in 
developing  demand.  It  requires  a  strong  executive  to  adjust 
the  two  branches. 

One  sales  manager  seriously  suggested  that  in  every  organiza- 
tion the  man  responsible  for  selling  the  goods  be  given  a  voice 
in  factory  control.  It  is  all  very  well,  he  said,  that  the  selling 
department  make  out  a  detailed  report  to  the  chief  of  the 
concern,  to  match  another  coming  from  the  factory  superin- 

*Pnntcrs  Ink,  December  22,  1910,  p.  59. 


MANUFACTURERS'   PROBLEMS  259 

tendent.  He  said  that  it  was  a  defect  common  to  most  business 
organizations,  that  orders  cannot  be  filled  promptly.  He 
called  this  defect  maladjustment,  as  avoidable  as  it  is  regret- 
table. He  said  that,  often,  certain  advertising  campaigns 
and  certain  mediums  of  advertising  find  themselves  in  bad 
odor  in  a  president's  office,  when  the  trouble  lies  with  the 
president  himself,  who  had  not  perfected  his  machine. 

The  manner  in  which  the  N.  K.  Fairbank  Company   has 

solved    the    question  is  complicated,  yet    it    is  said   to  be  a 

rpi  real  solution.     This  is  merely  the  ordinary  system 

Method  of  of  estimates  of  future  making  and  selling  carried 

the  N.  K.     out  to   the  very  farthest   degree.      Just   how   the 

Fairbank     sales  department  secures  the  data  is  made  clear  in 

*  a  letter  which  J.  D.  Lewis,  general  sales  manager, 

sent  early  in  the  year  to  his  sales  staff.    It  follows : 

To  Our  Sales  Staff: 

We  have  four  months  more  of  this  fiscal  year — 1909-1910  —  in  which 
to  reach  the  shipping  estimates  (there  will  be  less  than  four  months  when  you 
read  this).  We  must  reach  these  shipping  estimates  for  the  reason  that  our 
advertising  and  sales  expenditures  of  this  fiscal  year  are  based  upon  the  pledges 
for  this  year's  shipments  that  you  and  I  have  made. 

As  the  result  of  the  definite  promise  by  the  Sales  Department  that  our 
shipments  during  this  fiscal  year  would  reach  certain  figures,  certain  appro- 
priations were  made  for  saleswork  (including  the  salaries  and  sabs  expenses 
of  our  selling  staff),  and  for  advertising,  sampling,  house-to-house  work,  and 
various  other  mediums  of  publicity.  These  appropriations  were  much  larger 
than  any  made  previously  in  the  history  of  our  business,  owing  to  the  greater 
amount  of  business  that  the  Sales  Department  felt  satisfied  could  be  secured. 

These  expenditures  were  based  upon  the  general  or  total  estimates  made 
by  myself.  My  estimates  were  based  upon  the  estimates  of  our  territorial 
managers;  their  estimates  were  based  upon  those  of  their  general  salesmen; 
those  of  the  general  salesmen  on  the  shipment  of  previous  years,  together 
with  the  knowledge  of  our  greatly  increased  advertising  of  this  year  and  their 
confidence  in  our  being  able,  with  the  superiority  and  high  standing  of  our 
various  products,  to  secure  for  these  a  continuous  growth. 

You  know,  or  soon  will  know,  the  eight  months'  shipments  of  your  territory. 
Then,  you  can  figure  exactly  the  shipments  required  for  the  last  four  months 
of  this  fiscal  year  in  order  to  reach  your  estimates.  Much  can  be  accomplished 
during  these  last  four  months.  They  have  invariably  proved  the  most  extensive 
of  any  year  since  this  firm  has  been  in  business,  and  you  will  agree  with  me 
that  our  advertising  copy,  etc.,  have  been  unusually  attractive  and  strong  in 
character.  We  have  made  them  so  by  a  more  concentrated  sales  effort,  due 
to  our  realizing  just  what  must  be  done  in  a  given  time.  The  time  we  have  is 
four  months.  Speaking  of  our  business,  generally,  this  time  should  be  suflBcient, 
and  it  will  be,  if  no  part  of  it  is  wasted.  We  have  enough  time,  you  and  I, 
to  plan  and  conduct  a  most  thorough  campaign.  We  must  plan  what  amount 
still  needed  to  reach  your  shipping  estimates  for  1909-1910  must  be  secured 
during  May;  what  during  June,  July,  and  August. 


2G0        ADVERTISING  AS  A  BUSINESS  FORCE 

Keep  closely  posted  in  reference  to  your  shipments  of  aU  our  products.  Do 
not  slight  any.  Make  every  day  of  May,  June,  July,  and  August  count  in  gradually 
reducing  the  amount  that  it  is  now  necessary  to  secure  in  order  for  you  to 
reach  our  estimates  for  the  year.  Last  year  was  the  biggest  year  in  the  history 
of  our  business.  There  is  every  reason  why  1909-10  should  be  much  larger, 
and  you  have  predicted  that  it  will  be,  and  we  are  relying  upon  you  to  do 
your  share  in  making  it  a  "banner"  year  for  every  product.  The  company 
has  fulfilled  its  part  of  the  contract  —  it  is  "up  to  you"  to  make  good  your 

P^^^^^^-  J.  W.  Le^is, 

General  Sales  Manager. 

.  .  .  .  The  Sherwin-Williams  Company  has  worked  out 
a  system,  adaptable  to  the  paint  business,  which  the  general 
manager  of  the  company  describes  as  follows  in  a  statement: 

In  a  general    way  I    will    say    that    our    sales    campaigns    are,  of  course, 

largely  affected  by  the  producing  capacity  of  our  factories  but  during  the  past 

rp,  few  years  our  sales  organization  has  kept  ahead  of  the  factory 

„,      '^.        output  all  the  time.      In    other  words,  we  have  been  crowding 

Vir ...  •     "     our  factories  to  the  limit  in  order  to  take  care  of  orders   from 

IViUmms    j.jjg  gg^jgg  department. 

We  have  a  factory  output  report  which  comes  to  my  desk  each 
week,  and  which  gives  me  exact  information  as  to  what  we  are  doing  at  our  various 
factories.  In  addition  to  this  we  have  a  general  stock-keeper,  whose  duty 
it  is  to  keep  me  informed  of  the  exact  status  of  our  stock  or  raw  materials  as 
well  as  our  stock  of  manufactured  goods,  not  only  in  our  factories,  but  also 
in  all  of  our  branch  houses.  The  general  stock-keeper  receives  from  every 
warehouse  and  every  factory  each  month  what  is  known  as  an  overstock 
report,  and  on  this  report  is  listed  all  stocks  of  goods  that  are  over  and  above 
our  regular  stock  limits  and  which  are,  therefore,  evidently  slow  sellers.  These 
reports  are  consolidated  and  passed  through  to  my  office,  and  our  sales  and 
advertising  committee  immediately  takes  action  on  this  overstock  report  by 
inaugiu-ating  a  campaign  to  make  the  slow  sellers  quick  sellers. 

We  have  a  system  of  daily  and  weekly  sales  reports  from  all  of  our  various 
branch  offices  and  these  reports  are  consohdated  at  headquarters,  and  are 
used  as  a  basis  for  increasing  or  diminishing  factory  output.  For  instance, 
if  these  sales  reports  indicate  a  very  rapidly  increasing  volume  of  business 
as  compared  with  the  same  period  last  year,  we  immediately  notify  the  factory, 
and  they  make  provision  for  the  unusual  demand  that  is  sure  to  be  made 
upon  them. 

We  have,  of  course,  our  weekly  and  monthly  sales  acciu-ately  charted  for 
several  years,  and  when  this  present  year's  line  is  drawn  on  the  chart  its  fluctua- 
tions are  closely  watched,  and  the  necessary  information  passed  along  to  the 
factory,  so  that  there  can  be  the  closest  kind  of  co-operation. 

As  Mr.  Greene  recently  explained  in  an  article  written  for  Printers^  Ink, 
the  advertising  department  has  representatives  upon  our  sales  committee, 
and  they  are  in  close  touch  with  all  of  our  efforts  to  increase  our  volume  of 
business  and  secure  the  requisite  turnover. 

Adrian  D.  Joyce, 

General  Manager. 


MANUFACTURERS'  PROBLEMS  261 

Not  only  does  the  manufacturing  policy  and  the  selling  plan 
influence  the  advertising  campaign  and  its  place  in  the  policy 

The  At-     ^^  ^^^  concern   but   there   are   many   parts  of   the 

mosphere    production  processes  which  can   be   made  directly 

^  an"^    useful  in  creating  personal  atmosphere  for  the  goods. 

Advertising  in  connection  with  the  appeal  to  the  consumer.    This 

feature  atmosphere,  or  air  of  individuality,  may  in  some 
cases  be  pushed  so  far  as  to  become  a  definite  part  of  the  whole 
policy  of  the  company.  The  following  cases  of  this  are  thus 
described  by  A.  Rowden  King: 

*The  advertising  manager  who  in  these  days  reckons  without 
his  factory  is  handicapped.  Not  only  is  the  factory  capable 
of  suggesting  advertising  copy  with  a  broad  appeal,  but  a  close 
interrelationship  between  advertising  heads  and  factory  heads 
is  quite  as  necessary  as  between  advertising  heads  and  sales 
heads,  if  the  highest  possible  efficiency  is  to  be  had. 

If  it  is  a  chief  aim  of  good  advertising  to  impress  the  public 
with  an  idea  of  stability,  it  can  be  done  in  no  better  way 
than  by  publishing  pictures  or  descriptions  of  the  manufac- 
turer's factory  equipment.  There  the  factory  stands,  a  most 
tangible  and  conclusive  proof  of  the  advertiser's  ability  to  cope 
with  demand.  Reams  of  words  would  fail  to  carry  so  well  an 
understanding  of  the  manufacturer's  earnestness  to  build 
trade  and  to  keep  it.  Every  reader  of  normal  psychology 
must  feel  that  here  is  a  concern  anchored  to  one  spot  by  the 
weight  of  capital  invested  in  national  equipment.  Suspicions 
of  irresponsibility,  of  "fly-by-night"  policies,  are  allayed 
before  they  are  born.  A  reader  feels  by  instinct  that  a  com- 
pany thus  committed  to  keeping  a  plant  operating  has  a 
product  which  it  honestly  believes  will  continue  to  be  purchased 
on  its  merits  for  a  long  period  to  come.  Thus  an  advertiser 
wins  respect  and  establishes  character  —  a  long  step  toward 
selling  success. 

The  J.  B.  Williams  Soap  Company,  South  Glastonbury, 
Conn.,  claims  the  individual  distinction  of  being  the  only 
firm  to  make  a  permanent  advertising  talking-point  out  of  the 
fact  that  its  factory  is  situated  in  the  country,  the  inference 

*Pnnters'  Ink,  September  15,  1910,  p.  30. 


ADVERTISING  AS  A  BUSINESS  FORCE 

being  that  in  the  country  the  air  is  purer  and  conditions  are 
better  generally  for  the  workers  and  for  the  products  in  the 
making.  Whether  these  facts  are  necessarily  so  or  not,  they 
are  doubtless  full  of  human  interest  and  have  had  their  appeal. 

The  same  general  argument  of  factory  cleanliness  has  been 
made  a  foundation  of  the  advertising  of  a  number  of  food 
products  companies.  The  Franco-American  Food  Company, 
Jersey  City,  offers  an  excellent  example  of  this.  The  H.  J. 
Heinz  Company,  Pittsburgh,  has  used  it  to  a  considerable 
extent.  The  Shredded  Wheat  Company,  Niagara  Falls,  has 
trained  its  advertising  searchlight  upon  its  "factory  with  a 
thousand  windows."  The  Postum  Company,  Battle  Creek, 
Mich.,  has  been  second  to  none,  perhaps,  in  the  emphasis 
put  upon  the  factory  and  the  urgency  with  which  it  has  invited 
the  public  to  "reason."     . 

The  Anlieuser-Busch  Company,  St.  Louis,  is  another  example. 
It  built  up  its  reputation  by  leaps  and  bounds  at  the  time  of  the 
St.  Louis  Exposition  by  its  hospitality  at  the  factory  backed 
up  with  appropriate  advertising. 

The  immensity  of  factories  and  factory  outputs  is  always  a 
matter  of  human  interest.  The  Gillette  Safety  Razor  Company 
recently  ran  a  whole  advertising  campaign  emphasizing  the 
fact  that  six  big  factories  are  required  to  turn  out  output 
enough  to  supply  the  demand.  The  Hamilton,  Brown  Shoe 
Company,  St.  Louis,  is  now  advertising  the  fact  that,  if  its 
factories  and  warehouses  were  placed  side  by  side,  they  would 
extend  a  half  mile  along  a  street.  The  Weston  Electric  Com- 
pany, Newark,  has  persisted  in  emphasizing  the  immensity  of 
its  factories,  depicting  them,  among  other  things,  in  silhouette, 
against  the  skyline.  Other  instances  of  the  same  thing  will  be 
recalled  to  mind  with  little  trouble. 

Certainly  the  factory  is  the  only  part  of  the  internal  organi- 
zation in  which  the  public  can  be  expected  to  have  any  vital 
interest.  Certainly  a  description  of  the  bookkeeping  or  other 
similar  departments,  no  matter  how  well  written,  could  not  be 
expected  to  arouse  a  spark  of  enthusiasm.  The  public  has  a 
natural  curiosity  to  look  behind  the  scenes  at  the  factories 
where  the  products  it  uses  are  made,  especially  if  that  "look" 
does  not  require  much  time  and  inconvenience  and  means  no 
soiling  of  clothes.  Machines  become  almost  human  when  their 
quantitative  capacities  and  qualitative  intricacies  are  described 
by  experts. 


MANUFACTURERS'  PROBLEMS  263 

It  is  a  thing  too  often  overlooked  but  nevertheless  true  that 
it  can  be  made  a  matter  of  great  mutual  advantage  for  adver- 
tising and  factory  heads  to  get  together  and  talk 
The  Need  over  the  past  and  the  future.      A  growing  number 

of  ton-  ^£  ^j^g  y^'ise  advertising  managers  are  making  a  prac- 
tice  of  having  stated  hours  of  conference  with  their 
factory  heads,  at  which  particular  attention  is  given  to  the 
advertising  plans  of  the  immediate  future. 

Advertising  managers  sometimes  get  in  the  habit  of  looking 
upon  themselves  as  superior  to  any  suggestions  from  their 
confreres  in  the  manufacturing  line  of  their  business.  But 
factory  heads  are  clear-headed  men,  as  a  rule,  and  not  infre- 
quently they  are  able  to  make  advertising  suggestions  of  great 
practical  value.  Or,  if  not,  it  is  of  the  utmost  importance 
that  these  factory  heads  should  be  acquainted  in  detail  with 
the  consumer  demand  which  is  likely  to  develop  within  the 
succeeding  few  months,  due  to  advertising.  This  may  all 
seem  self-evident  and  yet  it  is  a  truth  which  is  by  no  means 
universally  recognized. 

Particularly  in  the  case  of  specialty  businesses,  periodical 
trips  of  inspection  through  the  factories,  under  the  guidance 
of  the  superintendents,  may  often  prove  of  the  highest  sug- 
gestive value  to  the  advertising  manager. 

The  advertising  manager  of  such  a  specialty  firm  tells  a 
story  which  involves  a  valuable  instance  of  this  sort  of  thing. 
One  day,  on  his  trip  through  the  factory  with  the  manager,  he 
came  to  a  machine  which  was  turning  out  strips  of  gummed 
paper  a  hundred  feet  long.  These  strips  were  rolled  up  into 
compact  space  like  bandages.  The  factory  manager  called  the 
advertising  man's  attention  to  them  and  said  "he'd  bet  he 
couldn't  guess  what  the  strips  were  used  for."  It  was  mysti- 
fying. It  was  then  explained  that  school  authorities  in  a  great 
Middle  West  city  had  found  these  strips  of  gummed  paper 
of  great  value  when  it  became  necessary  to  seal  up  rooms 
for  fumigation  purposes. 

But  there  lay  a  fine  opportunity  for  good  copy,  with  keen 
human  interest  behind  it,  an  opportunity,  which  was  timely 
in  view  of  the  fact  that  new  talking  points  had  been  particularly 
scarce  and  that  the  fear  of  being  compelled  to  make  colorless 
repetitions  to  rehash  former  copy,  had  seized  the  ad  man. 
The  gummed  paper  made  the  basis  of  a  fine  new  ad  brimming 
over  with  vitality  which  pulled. 


264        ADVERTISING  AS  A  BUSINESS  FORCE 

An    excellent    example    of    factory    advertising    has    been 

furnished  within  a  fortnight  by  the  L.  E.  Waterman  Company, 

„,         New  York,  which  opened  a  new  factory  September 

Waterman  10th.     There  can  be  little  question  but  that  much 

Factory    advertising  value  was  got   out  of   the  new  factory. 

and  Its  The  advertising  has  been  well  rounded  and  thorough. 
"^^'lif"^  The  foundation  of  all  this  Waterman  factory  ad- 
vertising was  a  full-page  "reader"  ad  which  ap- 
peared on  the  page  preceding  editorial  matter  in  the  September 
11th  issue  of  The  Monthly  Magazine  Section,  a  component  part 
of  the  Sunday  issues  of  six  big  newspapers  in  as  many  cities. 
This  "reader"  was  brimful  of  human  interest.  It  was  headed: 
"A  Million  a  Year  —  The  record  of  one  factory  in  one  of  the 
largest  industries  in  America." 

"To  hook  up"  with  this  advertising,  the  Waterman  dealers 
in  the  six  big  cities  referred  to  were  supplied  with  window  cards 
advising  the  public  to  read  the  story  "A  Million  a  Year"  in 
the  next  Sunday's  issue  of  the  local  paper.  The  same  advice 
was  contained  in  smaller  ads  placed  in  these  same  six  newspapers 
some  days  in  advance  of  the  "reader."  Reference  to  the 
same  article  was  also  incorporated  in  a  quarter-page  ad  run 
last  week  in  the  Saturday  Evening  Post.  A  double  centre 
spread  was  run  in  Leslie's  Weeeldy. 

But  the  fun  didn't  end  here.  F.  P.  Seymour,  the  Waterman 
advertising  manager,  further  rounded  out  his  factory  advertising 
campaign  with  a  page  ad  in  colors  in  the  September  11th  issue 
of  the  Associated  Sunday  Magazines,  and  the  Illustrated  Sunday 
Magazine,  in  which  particular  emphasis  was  put  upon  the 
opening  of  the  factory,  the  immensity  of  the  Waterman  business, 
and  the  number  and  intricacy  of  the  operations  required  to 
turn  out  each  pen. 

Furthermore,  local  advertising  was  done  in  practically  all 
the  New  York  papers  contemporaneously  with  the  opening 
of  the  new  factory,  far  more  display  advertising  being  indulged 
in,  as  a  matter  of  fact,  than  in  connection  with  the  opening 
of  the  colossal  Pennsylvania  Railroad's  new  terminal  in  New 
York  the  same  week.  Special  advertising  of  this  sort  was  also 
done  in  Baltimore  newspapers,  they  being  notably  untouched 
by  the  Sunday  magazine  lists. 

To  cap  the  climax  and  link  up  the  whole,  the  Waterman 
Company  invited  some  2,000  guests,  including  many  agents 
and  dealers,  to  attend  the  formal  opening  on  the  tenth,  when 


MANUFACTURERS'  PROBLEMS  265 

a  luncheon  was  served  and  a  careful  inspection  of  the  big 
building  was  in  order. 

Mr.  Seymour  is  an  enthusiastic  believer  in  the  advertising 
possibilities  of  close  contact  with  the  factory.  He  makes  a 
practice  of  having  periodical  talks  with  W.  I.  Ferris,  the 
Waterman  factory  head.  He  informs  the  latter  exactly  what 
he  is  planning  in  the  matter  of  immediate  advertising,  and  Mr. 
Ferris,  on  his  part,  being  so  close  in  touch  with  the  output 
conditions  and  thus  with  the  consumer  demand  is  frequently 
able  to  make  suggestions  of  the  greatest  value.     .     .     . 

USING  THE  SALES  OFFICE   BRAINS   IN   COPY   WRITING 

The   National   Cash  Register  Company,  of  Dayton,  Ohio, 

is  one  of  the  most  advanced  companies  in  the  United  States 

in  the  matter  of  adjusting   its    advertising  appeals 

National    to  the  various  factors  of  production  and  distribution. 

Cash       ^  very  interesting  series  of  articles  on  the  advertising 

Company    policy  of  the  company  appeared   in  Printers^   Ink 

rr  ^^'f''^  ,  during  September,  1911,  written  by  Mr.  E.  D.  Gibbs, 

Two-hundred-      ,  t  ,  .   .  ,. 

and- fifty-    who  was  lor  over  ten  years  advertismg  director  and 

word  Adver-  trainer  of  salesmen  for  the  National  Cash  Register 

tZSCTTlCtlt 

Company.  These  articles  make  the  interrelation 
between  departments  admirably  clear,  but  they  are  too  long  to 
reproduce  in  full.  In  the  course  of  one  of  these  articles  Mr. 
Gibbs  relates  one  incident  which  throws  an  interesting  light 
on  the  methods  of  the  company  in  using  the  best  brains  of 
its  production  and  selling  forces  in  the  solution  of  its  advertis- 
ing problems: 

*Some  six  months  or  so  ago  a  piece  of  printed  matter  was 
prepared  to  go  out  to  nearly  a  million  prospective  purchasers. 
In  size  it  was  about  8  by  12  inches.  It  was  in  colors  and  the 
space  left  for  type  admitted  of  the  use  of  about  two  hundred 
and  fifty  words  if  set  up  in  fairly  good  sized  type. 

When  the  proofs  of  the  illustrations  were  ready  Mr.  Patter- 
son had  them  sent  to  him  in  New  York,  where  he  was  studying 
some  sales  problems  in  connection  with  Mr.  Deeds,  the  vice- 

*Pnnters'  Ink,  September  14,  1911,  p.  3. 


266        ADVERTISING  AS  A  BUSINESS  FORCE 

president  of  the  company,  and  Mr.  Watson,  the  sales  manager. 
The  present  advertising  manager,  Mr.  Olwell,  was  not  then 
with  the  company,  otherwise  he  would  have  been  present. 
Mr.  Patterson  called  an  advertising  meeting  of  the  officers, 
and  as  I  was  in  New  York  at  the  time  he  invited  me  to  be 
present.  What  happened  will  seem  strange  to  some  readers 
of  these  articles.  We  devoted  two  days  to  loriting  tliose  two 
hundred  and  fifty  ivords. 

How  does  that  seem  to  you  men  who  dash  things  off  in  a 
hurry.''  What  would  an  agency  say  to  a  copy- writer  who  took 
two  days  to  write  a  two-hundred-and-fifty-word  advertisement.^ 
Yet  that  is  what  we  did.  And  the  reason  can  best  be  given  in  Mr. 
Patterson's  own  words.  Said  he:  "We  are  going  to  talk  to 
nearly  one  million  prospective  purchasers  in  thi^  one  small  piece 
of  printed  matter.  Whatever  we  say  must  be  right  to  the 
point,  understandable,  and  as  convincing  as  it  is  in  our  power 
to  make  it.  There  is  nothing  more  important  confronting 
us  at  this  moment  than  the  writing  of  this  advertLsement. 
It  is  costing  us  many  thousands  of  dollars  to  print  and  mail. 
It  must  tell  our  story  so  that  the  merchant  will  be  impressed 
and  encouraged  to  write  in  to  us.  It  is  because  of  the  impor- 
tance of  this  matter  that  I  have  called  this  meeting  of  the  heads 
of  our  company  to  prepare  the  reading  matter." 

I  looked  around  at  the  men  in  the  room  and  tried  to  figure 
in  my  own  mind  what  their  time  was  worth  per  day.  I  don't 
know  what  salary  the  president  pays  himself,  but  I  have  a 
very  good  idea  of  what  the  others  receive,  knowing,  as  I  do, 
how  important  is  their  work,  and  I  arrived  at  a  figure  which, 
to  say  the  least,  was  rather  startling. 

"Clearly,"  thought  I,  "this  is  the  most  expensive  staflf  of 
copy-writers  ever  assembled  in  one  place,  and  all  to  write  a 
two-hundred-and-fifty-word  advertisement.  Talk  about  thou- 
sand-doUar-a-week  writers,  they  were  not  in  it!" 

"Now,  then,"  continued  Mr.  Patterson,  "let  us  take  a 
blackboard  and  write  down  the  object  of  this  advertising, 
what  we  expect  to  accomplish,  what  message  we  wish  to  con- 
vey, the  class  of  people  we  are  trying  to  reach,  and  the  character 
of  the  advertisement  itself."     This  he  proceeded  to  do. 

"First,"  said  he,  "the  message  must  be  a  short  one.  It 
must  be  telegraphic.  Our  prospective  customers  are  busy 
people.  They  have  an  almost  endless  amount  of  detail  to 
attend  to.     We  must  send  them  a  telegram." 


MANUFACTURERS'  PROBLEMS  267 

In  the  meantime  he  put  down  on  the  blackboard  the  various 
thoughts  as  they  occurred  to  him.     .     .     . 

Then  he  called  for  suggestions,  and  each  man  in  the  room, 
including  myself,  gave  an  idea  of  what  to  say. 

It  is  not  worth  while  going  into  an  explanation  of  this 
particular  advertisement,  nor  of  what  the  final  choice  of 
two  hundred  and  fifty  words  consisted.  The  point  I  wish  to 
dwell  upon  is  that  the  president,  the  vice-president,  and  sales 
manager  of  a  $10,000,000  company  gave  up  two  days  to  the 
writing  of  one  circular. 

There  you  have  a  reason  for  the  success  of  the  N.  C.  R.- 
thoroughness.  As  they  say,  "Trifles  make  perfection  and 
perfection  is  no  trifle." 

Important  as  is  the  lesson  conveyed  by  the  above  explanation, 
the  results  secured  by  that  one  piece  of  printed  matter  are 
worth  studying.  The  question  is:  Was  it  all  worth  while.'* 
Did  the  advertising  make  good.f*  It  did.  The  company  never 
had  better  returns  from  any  printed  matter  sent  out.  So 
you  see  it  paid. 

Mr.  Patterson  has  often  made  this  statement:  "There  are 
two  things  to  which  I  must  devote  the  greater  part  of  my  time  — 
the  first  is  advertising,  the  second  selling.  If  we  advertise 
properly  we  pave  the  way  for  our  agents.  If  we  have  a  thor- 
oughly trained  selling  force  —  the  men  can  sell  our  goods  in 
good  times  or  bad.  The  important  things  to  do,  therefore, 
are  to  improve  our  advertising  and  improve  our  sales  force. 
If  we  get  the  orders  we  can  easily  manufacture  the  product 
and  make  the  proper  records,  but  first  we  must  get  the  orders." 

MARKET  PROBLEMS  —  STARTING  A  NEW  PRODUCT 

The  advertising  problems  involved  in  launching  a  new 
product  are  extremely  difiicult.  They  involve  first  establishing 
the  success  of  the  new  product,  and  then  protecting  it  from 
the  sharp  competition  which  is  one  of  the  inevitable  results  of 
this  success. 

,  .    ,    .        A  manufacturer  of  a  new  product,  therefore,  is 

Introducing       .  ... 

a  New     obliged  to  choose  his  selling  plan,  develop  a  corre- 

Product    spending  selling  staff,  create  his  demand,  and  prepare 

for  competition,  all  at  the  same  time.     Each  of  these  obviously 


268        ADVERTISING  AS  A  BUSINESS  FORCE 

has  its  bearing  on  the  ardoption  and  development  of  the  manu- 
facturer's policy  in  all  his  various  lines  of  activity.  An 
interesting  ease  of  new  product  problems  is  to  be  found  in 
connection  with  the  development  of  market  for  vacuum  clean- 
ers as  described  by  Roy  B.  Simpson,  who  is  now  advertising 
manager  of  the  Roberts,  Johnson  &  Rand  Shoe  Company,  of 
St.  Louis,  and  who  formerly  was  interested  in  exploiting  vacuum 
cleaners: 

*[Editorial  Note: — Any  business  man  who  is  willing  to 
take  the  time  to  think  and  analyze  can  get  a  valuable  lesson  out  of 
the  vicissitudes  which  have  beset  the  vacuum  cleaner  industry. 
To  establish  on  a  sound  financial  basis  a  class  of  goods  for  ivhich 
no  previous  demand  has  existed  requires  the  most  delicate  manipu- 
lation, an  extra-conservative  merchandising  policy,  and  a  very 
liberal  margin  of  profit.  The  typewriter,  the  piano-player,  the 
talking  machine  all  had  hard  sledding  at  the  start.  Why  ?  Be- 
cause out  of  every  dollar  spent  in  promotion  ninety  cents  must 
go  toward  creating  a  demand  for  that  general  type  of  article 
and  only  twenty  cents  are  left  to  bring  the  demand  home  to  your 
particular  factory.  If  you  start  as  a  manufacturer  of  clothing 
or  canned  goods,  your  problem  is  simply  that  of  capturing  a  part 
of  the  floating  demand.  You  do  not  have  to  argue  that  it  is  a 
good  thing  to  be  clothed  or  to  eat  food.  People  are  bound  to  buy 
hosiery  and  crackers  —  it  is  simply  a  question  of  which  brand 
they  ivill  buy. 

But  let  a  new  idea  like  a  vacuum  cleaner  be  launched,  a7id 
a  lot  of  Tnen  dash  into  it  as  they  would,  into  a  bonanza  gold  field. 
Instead  of  nuggets  lying  around  on  the  surface,  killing  icork  is 
necessary  to  unearth  them.  In  their  efl'orts  to  try  to  make  the 
thing  go  the  difi'erent  manufacturers  vie  with  each  other  in  cutting 
prices,  not  even  knoiving  that  they  are  getting  far  beyond  the 
danger  line.  Advertising  is  resorted  to  as  though  it  ivere  a 
miracle-worker.  It  is  asked  to  accomplish  the  impossible  and 
blamed  when  it  fails  to  overcome  unsound  merchandising  policies. 
If  the  article  itself  possesses  sufficient  merit  ayid  vitality,  the 
industry  will  eventually  right  itself  when  the  rainbow-chasers 
have  been  eliminated. 

Mr.  Simpson  was  advertising  manager  of  a  concern  making 

*Pnnters'  Ink,  July  18,  1912,  p.  34. 


MANUFACTURERS'  PROBLEMS  269 

a  vacuum  cleaner  during  the  "boom"  days.  He  gives  an  inside 
view  of  what  may  be  expected  when  men  rush  into  a  brand  new 
industry  without  having  counted  the  cost  and  then  try  to  save 
themselves  by  doing  business  on  an  impossible  price  basis  coupled 
with  extravagant  claims.  For  obvious  reasons,  the  names  given 
in  the  following  article  are  fictitious  but  only  the  names.] 

Three  years  ago  the  portable  vacuum  cleaner  business  looked 
so  promising  that  it  bid  fair  to  eclipse  all  other  specialties  used 
in  home  and  office.  Any  mechanical  device  bearing  the  name 
vacuum  cleaner  was  easy  to  sell.  A  joint  of  stove-pipe,  with 
a  cleaning  nozzle  on  one  end  and  a  plunger  handle  in  the  other 
end,  brought  ten  dollars.  It  was  a  cinch  to  finance  any  vacuum 
cleaner  scheme,  but  there  have  been  so  many  lamentable 
failures  that  the  investor  now  takes  an  extra  grip  on  his  pocket- 
book  when  vacuum  cleaners  are  mentioned. 

That  this  business  ha^  had  a  fearful  set-back  no  well-informed 
man  will  deny.  This  condition  is  due  to  patent  litigation, 
misrepresentation,  and  unfair  competition.  Several  large  and 
highly  prosperous  concerns  have  passed  through  a  period 
of  storm  and  only  time  and  careful  management  can  repair 
the  damage. 

The  portable  vacuum  cleaner  is  here  to  stay  —  there  is  no 
doubt  about  that.  It  is  a  necessity,  it  makes  the  home  sweeter 
and  cleaner.  It  eliminates  disease  dangers  and  helps  people 
to  live  longer.  Nothing  can  kill  it,  but  why  is  it  that  you  do 
not  see  the  vacuum  cleaner  advertised  to  the  same  extent 
as  three  years  ago? 

Let's  see  how  this  industry  was  created  and  what  made  it 
sick. 

About  five  years  ago  there  arose  a  need  for  a  small  portable 
machine  at  a  reasonable  price.  The  intelligent  housewife 
had  had  a  taste  of  vacuum  cleaning  by  the  large  wagon  ma- 
chines, but,  because  of  the  excessive  cost  of  the  service,  only 
the  rich  could  enjoy  it. 

The  Peerless  was  the  first  portable  machine  in  the  field.  It 
was  a  large,  cumbersome  affair,  operated  by  a  fan.  The 
price  of  this  device  ranged  from  $265  upward.  The  advertising 
was  strong  and  the  sales  plan  fundamentally  sound.  This 
machine  was  offered  as  a  labor-saving  device.  It  was  sold 
chiefly  to  people  of  wealth. 

A  year  later  the  Nonpareil  was  developed  and  placed  on  the 


270        ADVERTISING  AS  A  BUSINESS  FORCE 

market  at  a  price  of  $20  for  the  hand-operated  machine  and 
$60  for  electrical  equipment.  Within  a  year  agents  had  been 
appointed  in  nearly  a  thousand  towns  and  cities. 

The    third    portable    machine   of   note   was   the   Hygienic. 
This  machine  sold  for  $125,  with  a  complete  equip- 

When_    ment  of  tools.      It  is  of  the  highest  efficiency  pos- 
Uon^rew  ^^^^^  ^^   ^  portable    cleaner  and  is   sold   under   an 

Sharp     unlimited  guaranty. 

Shortly  after  the  appearance  of  the  Hygienic  ap- 
peared the  Little  Wonder,  almost  the  exact  duplicate  of  the 
Hygienic.  The  Little  Wonder  is  made  in  several  sizes,  at  $65 
to  $135. 

The  fifth  notable  success  was  the  Home  Helper  Suction 
Sweeper.  This  is  a  small  machine,  weighing  about  ten  pounds 
and  employing  a  rapidly  revolving  fan  as  its  cleaning  agent. 

There  were  numerous  other  devices  at  prices  ranging  from 
$5  upward,  but  all  of  them,  save  one,  were  short-lived.  The 
one  exception,  the  Domestic,  was  sold  at  $8.50. 

Here  we  have  five  concerns,  which  in  a  short  time  obtained 
a  tremendous  distribution.  Their  profits  were  large  and  during 
1910  it  is  estimated  that  they  spent  close  to  $1,000,000  for 
advertising  in  the  popular  weekly  publications,  standard  maga- 
zines, and  other  media,  but  much  of  this  advertising  has 
disappeared. 

As  one  who  is  in  the  thick  of  the  fight,  I  can  frankly  discuss 
the  reasons  why  these  great  advertising  propositions  were 
killed.  I  have  no  hesitation  in  giving  the  reasons,  believing 
that  the  several  promoters  now  admit  their  errors.  These  were 
errors  of  judgment  in  placing  too  much  confidence  in  the  claims 
of  over-enthusiastic  inventors.  As  a  rule  the  several  concerns 
mentioned  are  headed  by  men  of  high  character  and  integrity. 

The  Nonpareil  cleaner  probably  had  a  larger  sale  during  the 
first  three  years  than  any  of  the  five  we  have  named  and  the 
business  would  be  alive  and  prosperous  to-day  but  for  the 
grevious  error  in  publishing  the  names  and  addresses  of  all  of 
its  agents  in  double-page  spreads.  Within  twenty-four  hours 
after  the  appearance  of  this  large  advertisement  competitors 
were  assailing  the  sales  organization  with  a  view  to  breaking  it 
up.  They  succeeded.  Within  a  few  months  this  concern  went 
out  of  existence. 

The  Hygienic  is  a  high-grade  machine.  Theoretically  and 
practically,  it  meets  all  requirements  of  cleaning  in  the  home. 


MANUFACTURERS'  PROBLEMS  271 

The  Hygienic  people  fought  its  competitors  fairly  and  mot  the 

fierce  patent   litigation    honorably.    The   first    advertisement 

played  up  the  hygienic  idea  very  strongly.     This  was 

^  .^^"'    a  new  thought  and  it  met  with  a  response  so  great 

P(dnt  ^^^  it  brought  a  large  volume  of  immediate  use 
orders,  and  guaranteed  contracts  aggregating  over  a 
half  million  dollars. 

Competitors  who  had  been  featuring  the  vacuum  cleaner 
as  a  labor-saving  device  immediately  recognized  the  value 
of  the  sanitary  argument.  They  endeavored  to  beat  the 
Hygienic  advertising  by  making  claims  just  a  little  bit  stronger, 
but  this  did  not  increase  sales  to  any  great  extent,  although 
it  diverted  the  attention  from  the  Hygienic  campaign. 

The  Home  Helper  Suction  Sweeper,  which  serves  its  purpose 
admirably  as  an  electric  carpet  sweeper,  was  advertised  to  be 
lighter  than  an  ordinary  carpet  sweeper,  but,  as  a  matter  of 
fact,  it  was  several  pounds  heavier  than  the  Bissell  carpet 
sweeper.  The  Home  Helper  was  also  advertised  "to  do  all 
that  any  vacuum  cleaner  would  do,  and  more."  This  overrated 
the  efficiency  of  the  machine,  as  was  proved  by  practical 
comparative  tests.  Many  of  the  prominent  magazines  carried 
the  Home  Helper  copy.  Other  advertisers  protested  against 
the  unfair  claims  in  the  copy,  but  the  publishers  refused  to 
eliminate  them. 

Very  often  a  single  issue  of  the  popular  publications  carried 
the  copy  of  six  to  ten  cleaners,  ranging  in  price  from  $6  to 
$125.  All  of  them  are  represented  to  be  the  "  best  in  the  world  " 
and  some  claimed  to  be  "better  than  the  best."  The  Hygi- 
enic and  the  Little  Wonder,  both  of  which  are  vacuum 
cleaners  of  high  efficiency,  were  in  competition  with  suction 
sweeper  and  the  toy  hand-power  machines. 

The  vacuum  cleaner  and  the  suction  sweeper  are  two  different 
propositions.  The  former  is  for  thorough  cleaning  and  the 
latter  is  for  surface  sweeping.  But  the  public  had  not  learned 
to  discriminate  between  the  two  and  any  mechanical  cleaning 
device  was  accepted  as  a  "vacuum  cleaner."  The  business  suf- 
fered because  of  the  comparative  statements  in  the  advertising. 

The  prospective  buyer  was  not  interested  in  a  Hygienic  at 
$125,  after  reading  the  Home  Helper  oflfer  —  to  put  a  better 
machine  in  their  homes  for  $1  down  and  $3  per  month,  until 
the  full  instalment  price  of  $73  had  been  paid.  To  the  general 
public  this  proposition  seemed  reasonable.     Why  pay  $125 


272        ADVERTISING  AS  A  BUSINESS  FORCE 

for  a  cleaner  when  you  can  get  one  for  $65  cash  or  $73  on 
instalments,  that  "weighs  less  than  a  carpet  sweeper  and 
will  do  all  and  more  than  any  other  vacuum  cleaner  can  do?" 

A  vast  number  of  people  who  bought  the  Home  Helper 
and  cheaper  machines  were  not  satisfied.  They  based  their 
opinion  of  the  whole  vacuum  cleaner  subject  on  the  results 
obtained  with  electric  sweepers  and  cheap  hand-pow  er  machines. 

The  Home  Helper  suffered  in  turn  by  the  advertising  of  the 
Domestic  vacuum  cleaner,  at  $8.50,  and  others  in  the  same 
class.  The  Domestic  machine  was  a  hand-power  apparatus 
of  little  or  no  real  cleaning  efficiency.  Tens  of  thousands  of 
them  were  sold  and  they  would  still  be  on  the  market  but  for 
the  fact  that  Uncle  Sam  decided  it  was  wrong  to  use  the  mails 
to  sell  a  "vacuum  cleaner  without  a  vacuum."  Its  promoters 
were  convicted  for  using  the  mails  to  defraud. 

Another  factor  in  retarding  the  progress  of  this  great  industry 
was  the  strenuous  efforts  of  the  Little  Wonder  and  Home 
Helper  people  to  beat  each  other  on  the  instalment  proposition. 
The  Little  Wonder  concern  was  struck  with  the  attractiveness 
of  the  Home  Helper  offer,  and  to  divert  the  attention  of  the 
people  away  from  the  Home  Helper,  the  public  was  urged 
to  buy  a  Little  Wonder  machine  for  a  small  cash  payment  and 
let  the  rentals  of  it  pay  the  balance. 

A  large  instalment  business  was  the  natural  result  and  there 
was  nothing  to  prevent  any  purchaser  from  renting  his  machine 
every  day.  An  initial  payment  of  $3  secured  a  cleaner.  The 
purchaser  would  rent  it  to  his  friends  and  relatives  for  $2  or 
more  per  day.  Thus,  in  a  month,  the  machine  would  probably 
be  used  260  hours,  while  in  the  average  family,  where  the 
machine  was  owned  outright,  it  would  be  used  about  two 
hours  a  week.  Therefore,  a  cleaner  bought  on  the  instalment 
plan  would  get  130  weeks'  family  use  during  the  first  month. 

Suppose  the  purchaser  defaulted  his  first  payment  and  allowed 
the  machine  to  go  back.  Many,  no  doubt,  were  unscrupulous 
enough  to  do  this,  after  having  rented  it  twenty-six  days  at 
$2  per  day.     This    plan  of  selling  put  a  crimp    in  the  Home 

P  „■       Helper   sales  plan  and  it  soon  became  known  that 

the  Sales  anybody  could  get   a  vacuum   cleaner  for  a  whole 

Methods  month  for  $1  for  the  Home  Helper  and  $3  for  the 
071  a  NeiD  Little  Wonder.  Under  such  conditions  who  but  the 
^"''^  real  honorable  folks  would  pay  %Q5,  $75  or  $115  spot 
cash  for  a  vacuum  cleaner.'* 


MANUFACTURERS'  PROBLEMS  273 

During  the  first  year  or  so  there  was  a  hirge  sale  of  vacuum 
cleaners  direct  to  the  user  by  mail.  The  general  ])ublic  had 
confidence  in  the  advertising.  But,  after  the  circus  performance 
through  which  the  business  passed,  vacuum  cleaner  advertising 
was  looked  upon  with  suspicion.  The  publishers  are  as  much 
to  blame  as  the  manufacturers,  because  nearly  all  the  publishers 
refused  to  make  a  comparative  test  of  the  various  cleaning 
devices  advertised  in  their  columns.  Had  they  done  so,  as 
they  were  urged  to  do,  business  honesty  would  have  compelled 
them  to  eliminate  all  copy  containing  comparative  statements 
of  whatsoever  nature. 

No  doubt  there  are  as  many  vacuum  cleaners  sold  to-day 
as  there  were  a  few  years  ago,  but  the  volume  of  business 
should  be  much  larger.  After  a  while  little  the  general  public 
will  forget  its  experience  in  buying  on  advertised  claims  and 
the  vacuum  cleaner  will  again  be  a  splendid  advertising  propo- 
sition, but  for  the  present  vacuum  cleaners  must  be  sold  on  their 
merits  —  for  what  they  are.  Machines  of  the  Home  Helper 
type  should  be  sold  as  electric  carpet  sweepers  and  not  as 
vacuum  cleaners,  and  all  machines  must  be  sold  on  demonstra- 
tion in  the  home. 

The  vacuum  cleaner  is  here  to  stay.  It  is  now  a  necessity  in 
every  well-ordered  home,  and  if  promoted  in  a  businesslike 
manner  it  will  ultimately  become  greater  than  sewing  machines, 
cash  registers  and  typewriters  combined,  because  every  owner 
of  those  devices  is  a  possible  purchaser  of  a  vacuum  cleaner. 


MARKET   PROBLEMS  —  PROTECTING    THE   GOODS 

An  advertiser  of  branded  goods  is  not  merely  selling  goods, 
he  is  planning  for  future  sales.  His  interest  in  the  goods, 
then,  covers  not  only  their  intrinsic  value;  it  involves  also 
the  attitude  of  the  market  toward  the  goods.  His  interest 
in  his  product  does  not  end  with  its  sale,  it  embraces  everything 
which  may  help  or  mar  its  reputation.  He  is  obliged  to 
protect  his  own  reputation  by  protecting  the  reputation  of  the 
goods  on  the  market.  Roy  W.  Johnson  gives  a  number  of 
instances  of  this  feature  of  the  manufacturers'  advertising 
activity  from  which  we  draw  the  following: 


274        ADVERTISING  AS  A  BUSINESS  FORCE 

*It  is  becoming  more  clearly    recognized   every   day  that 

the  manufacturer  of  branded  goods  —  whether  they  be  food 

Protecting  products,  or  jewelry,  or  packing  for  steam  engines  — 

the  Goods  does  not  part  with  his  interest  in  or   responsibility 

on  the     for  them  the  moment   the  goods  themselves  leave 

Market  jjjg  hands.  It  is  getting  to  be  understood  that 
the  goods  are  entitled  to  protection  while  they  are  in  the 
hands  of  distributors,  and  that  upon  the  effectiveness  and  the 
scope  of  such  protection  much  of  the  value  of  the  trade-mark 
depends.  The  value  of  the  trade-mark  as  a  guarantee  of  quality 
can  be  very  quickly  impaired  if  it  is  possible  for  a  jobber  to 
sell  goods  which  have  grown  stale  or  which  have  become  defec- 
tive through  careless  handling. 

It  is  incumbent  upon  the  manufacturer  to  watch  all  the 
factors  of  distribution  very  closely.  Some  manufacturers  have 
the  ultimate  consumer  in  mind  as  the  most  important  factor, 
and  overlook  tlie  jobber  and  dealer  almost  entirely.  Still 
others  take  the  attitude  that  "we  sell  only  to  jobbers,"  and 
what  becomes  of  the  goods  after  that  is  a  matter  of  little 
consequence.  Either  extreme  is  dangerous.  The  process  of 
selling  is  of  equal  importance  with  the  process  of  manufacturing, 
and  the  goods  are  entitled  to  as  much  protection  in  the  various 
stages  of  the  selling  process  as  they  receive  in  their  progress 
through  the  factory.  Much  of  the  effectiveness  of  the  manu- 
facturer's chain-store  system  of  distribution  is  undoubtedly 
due  to  the  fact  that  the  goods  are  protected,  in  price,  quality, 
and  everything  else,  until  they  are  placed  in  the  hands  of 
the  actual  consumer. 

Of  course,  in  the  end,  it  comes  down  to  the  ultimate  con- 
sumer as  judge  and  jury.  He  it  is  who  determines  the  reputa- 
tion of  the  brand,  and  upon  the  reputation  of  the  brand  the 
business  rises  or  falls. 

The  average  manufacturer  comes  in  contact  with  the  ulti- 
mate consumer  in  two  ways,  through  his  advertising  and 
through  the  price  of  his  goods,  and  it  is  just  about  as  necessary 
to  protect  the  price  as  it  is  to  keep  the  advertising  within  the 
bounds  of  truth.  But  in  the  matter  of  price  protection  a 
good  many  factors  enter  in  which  do  not  appear  on  the  surface. 

A  couple  of  wholesale  grocers  in  Philadelphia  who  do  business 
by  the  catalogue  route,  employing  no  salesmen  and  securing 


*Printers   Ink,  June  13,  1912,  p.  20. 


MANUFACTURERS'  PROBLEMS  275 

cash  in  advance,  recently  sent  out  to  the  retail  trade  a  long 
list  of  cut  prices  on  different  brands  of  standard,  advertised 
goods.  The  cut  prices  were  justified  on  the  ground  that, 
since  they  had  no  salesmen  to  hire  and  no  credits  to  carry, 
they  could  do  business  cheaper  than  their  competitors. 

The  ire  of  the  Tri-State  Wholesale  Grocers'  Association 
which  includes  most  of  the  credit  jobbers  in  Philadelphia 
territory  was  roused,  and  resulted  in  a  crop  of  letters  to  the 
manufacturers  of  the  goods  which  had  been  cut,  demanding 
either  a  reduction  in  the  manufacturers'  prices  sufficient  to 
enable  the  members  of  the  Association  to  meet  the  cut,  or 
the  compulsion  of  the  cash  jobbers  to  restore  the  regular  price. 

Here  was  a  case  where,  apparently,  the  ultimate  consumer 
was  not  involved  at  all.  There  was  no  certainty  that  the 
retail  grocers  who  benefited  by  the  cut  prices  would  hand  the 
margin  on  down  to  their  customers.  It  was  a  dispute  between 
jobbers  exclusively,  and  both  sides  seemed  to  have  considerable 
justification  for  their  contentions.  The  attitude  of  the  modern 
merchandiser  is  indicated  in  the  action  of  the  Cudahy  Packing 
Company  which  promptly  "cut  off"  the  cash  jobbers  from  the 
supply  of  Old  Dutch  Cleanser,  preferring  to  lose  a  couple  of 
good  customers  to  running  the  risk  of  disorganizing  the  whole 
territory.  Moreover  it  is  significant  that  the  Cudahy  Packing 
Company  was  not  one  of  the  manufacturers  written  to  by 
the  Association.  Their  action  was  not  taken  because  of  a 
veiled  threat  on  the  part  of  the  other  jobbers,  but  because  it 
was  good  business. 

Sometimes    price    cutting    results    in    a    trial    of   strength 

between   the   manufacturer   and    the    cutter.       The   Johnson 

Chemical    Company   some   time  ago  inaugurated  a 

Upholdmg  campaign  of  dealer  promotion  and  newspaper  adver- 

Policy     tising  for  Johnson's  Foot  Soap.      The  plan  consisted 

of  a  trial  order  to  the  dealer  which   would   enable 

him  to  make  a  display  of  the  soap,  with  the  understanding 

that  the  company  would  take  it  off  his  hands  if  the  advertising 

failed  to  move  it. 

In  Hartford  the  newspaper  advertising  was  the  signal  for  a 
cut-price  campaign  by  a  local  department  store.  The  soap 
was  sold  at  the  rate  of  17  cents  per  cake,  though  the  wholesale 
price  was  16f  cents,  and  the  regular  price  to  the  consumer 
25  cents.  The  trial  orders  to  dealers  had  been  supplied  through 
the  jobber,  and  the  jobber  had  been  stocked  in  excess  of  the 


276        ADVERTISING  AS  A  BUSINESS  FORCE 

trial  order  requirements  in  anticipation  of  a  demand.  As  a 
consequence  the  department  store  had  a  substantial  source  of 
supply  which  was  augmented  from  time  to  time  by  the  small 
dealer's  stocks  which  were  thrown  back  upon  the  jobber 
because  there  was  no  sale  for  the  soap  at  the  25-cent  rate. 

The  manufacturer  naturally  cut  off  the  jobber  from  further 
supplies  from  headquarters,  and  stopped  all  newspaper  adver- 
tising in  Hartford.  The  department  store  maintained  the  cut 
price  for  several  months  —  as  long  as  the  soap  could  be  had 
from  the  jobber  —  but  was  finally  forced  to  restore  the  price 
to  normal.  Of  course  the  cut  price  on  the  soap  was  used  merely 
as  a  "bait"  to  get  people  into  the  store  and  sell  them  other 
things  at  a  profit,  and  as  it  had  got  to  be  an  old  story  the 
cut  was  not  repeated. 

Then  the  manufacturer  reaped  his  profit  from  the  people 
who  had  been  educated  to  the  soap  by  the  department  store's 
advertising,  and  were  now  obliged  to  pay  the  full  price  for  it. 

A   good   many   manufacturers   of   branded  goods  refuse  to 

sell  department  stores  at  all,  for  the  large  department  stores 

demand  jobbers'  discounts,  purchasing  direct   from 

Selling  to  ^.j^^  manufacturer.     They  claim  that  they  are  entitled 

^Stores"^ ^^  this  discount  since  they  buy  in  large  quantities, 
but  the  large  margin  —  approximately  60  per  cent, 
is  demanded  by  most  of  the  largest  stores  —  gives  a  splen- 
did opportunity  for  cutting  prices.  Of  course  the  manu- 
facturer of  patented  goods  has  some  legal  recourse  when  the 
price  is  cut  (though  how  long  he  will  have  it  is  a  matter  of 
some  uncertainty)  and  he  can  afford  to  allow  the  jobbers' 
discount  for  large  purchases;  but  the  man  whose  goods  are 
unpatented  frequently  cuts  the  department  store  out  entirely. 
That  simply  means,  of  course,  that  the  store  must  get  the 
goods  from  a  regular  jobber  at  somewhere  near  the  retailer's 
price,  if  it  handles  them  at  all,  and  the  danger  of  cut  prices 
is  somewhat  minimized.  Such  a  condition,  of  course,  breeds 
competition  in  department  stores'  private  brands,  but  that 
is  much  better  than  a  cut  price  which  is  bound  to  depreciate 
the  value  of  the  standard  trade-mark  in  the  eyes  of  consumers. 

Indeed  this  matter  of  price  infringement  is  getting  to  be 
more  seriously  regarded  every  day,  as  it  becomes  more  clearly 
realized  that  the  price  stands  for  something  to  the  consumer, 
just  as  the  trade-mark  stands  for  something.  A  price,  in  the 
consumer's  view,  is  either  fair  or  unfair,  and  a  cut  price  indicates 


MANUFACTURERS'  PROBLEMS  277 

pretty  strongly  that  the  regular  price  is  too  high.  The  average 
consumer  does  not  stop  to  figure  out  the  policy  of  selling 
one  thing  at  a  loss  for  tlie  purpose  of  selling  two  other 
things  at  a  high  profit.  He  does  not  understand  the  system, 
practised  by  some  stores,  of  under-pricing  a  small  lot  of  standard 
goods  so  that  private-brand  goods  can  be  unloaded  upon  those 
who  come  after  the  supply  of  the  standard  goods  is  exhausted: 
such  as,  for  example,  advertising  "Big  Ben  clocks  for  $1.79" 
when  there  are  only  a  couple  of  dozen  in  the  store,  and  when 
those  are  gone  selling  unpedigreed  cheap  clocks  for  the  same 
money.  Instead  of  blaming  the  cut-price  store  for  putting 
up  a  job  on  him,  the  consumer  blames  the  manufacturer  for 
trying  to  make  an  exorbitant  profit. 

In  consequence  of  which  there  is  a  marked  tendency  toward 

abolishing  quantity  discounts,  and   giving   every   dealer  and 

y/jg       every  jobber  an  equal  chance  for  a  profit,  whether 

Quantity  he  be  small  or  large.      A  sort  of  by-product  of  the 

Price  quantity  discount  is  the  free-deal,  and  that  is  growing 
Problem  unpopular  also.  It  is  coming  to  be  recognized  that 
the  quantity  discount  is  a  hardship  on  the  small  buyer,  not 
only  because  he  makes  a  smaller  margin  of  profit,  but  also 
because  it  gives  the  big  fellow  an  opportunity  to  cut  the  price 
and  injure  the  small  man's  market. 

Instances  of  this  trend  are  not  far  to  seek.  The  Ingersoll 
Dollar  Watch  has  been  on  the  market  some  twenty  years, 
beginning  its  career  when  the  quantity  discounts  system  was 
the  only  plan  of  doing  business.  Consequently  it  is  sold  on 
a  sliding  scale  of  prices  to  the  retailer,  ranging  from  75  cents  to 
Q5  cents  according  to  the  quantity  purchased  at  one  time.  But 
on  the  later  products  of  the  Ingersoll  factory  the  sliding  scale 
has  been  abandoned,  and  the  $25  watch  is  sold  to  the  trade  at 
a  uniform  rate  of  $16.67,  regardless  of  whether  the  retailer 
buys  two  watches  or  a  thousand. 

It  is  quite  true  that  the  Ingersoll  watch  is  a  patented  article 
upon  which  the  resale  price  can  be  legally  maintained,  thus 
relieving  the  dealer  from  cut-price  competition.  For  that 
reason  it  may  be  easier  to  uphold  a  flat-rate  price  to  the  dealer 
than  would  be  the  case  with  an  unpatented  article.  But  as  a 
matter  of  fact  the  flat  rate  can  be  maintained  on  articles  which 
are  not  covered  by  any  patent.     .     . 

Kellogg's  Toasted  Corn  Flakes  are  sold  at  an  absolutely 
flat  rate  to  the  retailer  of  $2.80  per  case  of  thirty-six  packages. 


278        ADVERTISING  AS  A  BUSINESS  FORCE 

The  rate  is  not  cut  by  free  deals,  rebates  or  any  other  subterra- 
nean methods.     And  there  is  plenty  of  competition  in  the  corn- 
flake business ;  free-deal  competition,  private-brand  competition, 
and  bag-package  competition.     Not  long  ago  one  of  the  big  mail- 
order houses  advertised  Kellogg's  in  its  catalogue  at  a  price  which 
represented  an  absolute  loss.     The  Kellogg  Company,  through 
its  house-organ  for  dealers,  absolutely  repudiated  the  sale  to 
the  mail-order  house,  and  spent  considerable  time  and  money 
to  find  out  what  jobber  had  sold  the  goods  in  question.   A  threat 
to  cut  him  off  —  which  he  knew  would  be  carried  out  to  the 
letter  —  was  sufficient  to  deter  him  from  any  future  experi- 
ments in  that  direction,  and  the  publicity  given  to  the  affair  in 
the  house-organ  had  a  salutary  effect  all  along  the  line.     .     .     . 
The  dealers'  house-organ,  indeed,  can  be  made  a  very  effec- 
tive means  of  protecting  the  goods  on  the  market,  not  only 
as  a  means  of  educating  dealers  in  the  house  policy. 
Educating  ]^^^  ^^  ^  weapon  in   dealing  with  specific  cases  like 
Dealers    ^^  above.      Small  dealers,  particularly  in  the  coun- 
try towns,  are  quick  to  become  disgruntled  at  the 
advent  of  the  price-cutter,  whether  it  is  a  mail-order  house 
or  a  big  store  in  the  neighboring  county-seat.      The  house- 
organ  gets  to  them  all  at  once  and  quickly,  and  can  explain  a 
situation  at  greater  length  and  in  terms  which  would  be  impos- 
sible in  any  other  way. 

Some  houses,  like  Colgate  for  example,  place  so  much 
importance  upon  the  necessity  of  protecting  the  goods  that 
they  maintain  a  more  or  less  elaborate  system  of 
Proiechon  "watchers,"  who  look  out  for  all  sorts  of  conditions 
qfWatch'ers  which  might  injure  the  goods  in  the  eyes  of  con- 
sumers. In  addition  to  this  there  is  a  system  of  rebates 
or  bonuses,  whereby  the  retailer  earns  a  sort  of  retroactive  dis- 
count if  he  does  not  cut  the  price,  maintains  his  stock  at  a 
suitable  standard,  etc.  This  system  obviates  one  of  the  objec- 
tions to  the  free  deal,  inasmuch  as  the  discount  applies  on  the 
retailer's  next  order,  and  there  is  no  temptation  for  him  to 
overstock  —  which  often  means  stale  goods  —  to  get  the 
discount.  Moreover,  the  rebate  applies  to  all  purchases, 
of  whatever  size,  and  is  a  reward  for  living  up  to  a  certain 
standard  of  merchandising,  rather  than  an  inducement  to 
purchase  goods.  Hence  the  small  dealer  profits  at  the  same 
rate  as  the  large  dealer,  and  a  good  deal  of  possible  ill-feeling  is 
eliminated. 


MANUFACTURERS'  PROBLEMS  279 

On  some  lines  of  goods  which  are  seasonable  —  like  wearing 
apparel,  for  instance  —  it  is  necessary  to  cut  the  price  at 
certain  times  to  protect  the  dealer  from  the  necessity  of  carrying 
the  goods  over  to  the  next  season,  at  which  time  they  may  not  be 
salable.  Some  manufacturers  protect  the  reputation  of  the 
goods  at  such  times  by  supervising  the  cut  sales  themselves, 
inserting  newspaper  advertisements  in  the  names  of  the 
dealers,  offering  the  goods  at  certain  uniform  reductions. 
Thus,  all  dealers  cut  at  the  same  time,  and  to  the  same  degree. 
Moreover,  the  manufacturer  is  enabled  to  explain  to  the  con- 
sumer the  reasons  for  the  reductions.  Frequently  imperfect 
goods  or  "seconds"  are  sold  at  reduced  prices,  but  are  not 
allowed  to  get  into  dealers'  hands  indiscriminately.     .     .     . 

Manufacturers  in  some  lines,  like  Dunlap  hats,  Manhattan 

Protection  shirts,  etc.,  protect  the  goods  by  appointing  exclusive 

by        dealers  in  towns  or  certain  sections  of  cities.     It  is 

Exclusive  a  simple   matter  to  take   the  line  elsewhere   if   the 

Ageiicies   (jg^ler  cuts  the  price,  or  does  not  maintain  a  suitable 

assortment  in  stock,  or  does  not  keep  his   stock  in  proper 

order,  etc. 

But  suppose  a  dealer  has  been  unintentionally  overstocked, 
or  cannot  sell  the  goods  in  his  town,  or  goes  out  of  business. 
Suppose  he  goes  into  bankruptcy,  and  a  receiver's  sale  follows. 
A  cut  price  on  the  goods  is  the  result,  frequently  accompanied 
by  the  practice  of  passing  off  damaged  goods  as  perfect.  The 
Gillette  Razor  Company  and  the  Columbia  Graphophone  Com- 
pany, among  others,  meet  this  condition  by  taking  back  all 
goods,  which  are  not  salable  at  the  regular  price,  at  the  full 
price  paid  by  the  dealer  for  them.  The  goods  are  either  taken 
back  through  the  jobber,  or  some  other  dealer  is  found  in  the 
vicinity  who  will  stock  the  line.  In  any  case  the  full  value  is 
allowed,  which  means  every  cent  the  first  dealer  paid  for  the 
goods. 

Damaged  or  shopworn  goods,  or  goods  which  have  become 
unpopular,  in  some  cases  are  sold  at  a  reduced  price,  but  there 
is  a  growing  tendency  to  exchange  them  for  perfect  goods 
rather  than  allow  them  to  injure  the  reputation  of  the  line 
either  for  price  or  quality.  Sometimes  the  dealer  is  permitted 
to  make  an  even  exchange  —  one  damaged  article  for  one  good 
one  —  and  sometimes  he  is  required  to  buy  new  goods  to  a 
certain  proportion  of  his  exchanges.  The  talking  machine 
companies  every  year  issue  lists  of  "cut-out"  records;    that 


280        ADVERTISING  AS  A  BUSINESS  FORCE 

is,  records  of  songs  of  the  day  and  the  like  which  have  lost 
popularity.  These  records  are  made  the  basis  of  an  exchange 
proposition,  one  popular  record  of  the  dealer's  own  selection 
being  given  for  one  record  from  the  cut-out  list.  Usually 
there  is  a  provision  that  dealers  purchase  at  least  one  record 
for  every  exchange  made.  That  is  partly  for  the  purpose  of 
making  more  sales,  and  partly  to  minimize  transactions  at 
the  factory  by  inducing  dealers  to  make  their  purchases  at 
the  same  time  with  the  exchanges. 

Protecting  the  goods  on  the  market  costs  money,  and  some- 
times it  loohs  as  though  it  meant  the  loss  of  some  immediate 
sales.  But  it  pays  dividends  in  the  form  of  increased  loyalty 
of  the  dealers  and  in  preventing  depreciation  of  the  name 
value  of  the  product.  Twenty  years  ago  it  would  have  been 
difficult  to  find  half  a  dozen  concerns  who  really  tried  to  do  it. 
To-day  there  are  scores  who  not  only  try,  but  in  the  great 
majority  of  cases  succeed  in  keeping  the  reputation  of  their 
goods  free  from  the  blemishes  which  attack  them  while  they 
are  on  the  road  from  manufacturer  to  consumer. 

Another  case  of  the  protection  of  the  goods  on  the  market 

brings  out  the  similarity  between  some  phases  of  this  problem 

Gu   diro  ^^^  ^^^^  phases  of  the   substitution  problem   which 

Against    we  have  already  discussed  in  various   other  places. 

Imitators    rpj^j^  j^   ^   ^^^^    ^^jj    ^^  ^    ^y     q^^^^    ^^^    ^^Ij^    ^^^ 

story  of  a  drug  specialty  which  has  been  extensively  advertised 
during  the  past  three  years: 

*It  fell  to  the  lot  of  "Tiz,"  the  foot  remedy,  to  be  imitated 
the  moment  it  became  exploited  as  a  great  selling  success. 
Imitators  came  forward  by  the  half-dozen,  fondly  hoping  to 
jump  into  the  market  so  carefully,  and  even  painfully,  made 
ready  by  the  "Tiz"  advertising.  The  necessity  of  maintaining 
sales  against  the  late  comers  explains  why  "Tiz"  is  now 
appearing  in  painted  display  bulletins.  Until  this  problem 
arose  "Tiz"  had  never  been  "outdoors." 

Competition  has  frequently  stopped  at  nothing.  It  has 
boldly  followed  the  type  and  style  of  the  newspaper  "Tiz" 
ads;  it  has  even  in  some  cases  laid  the  name  of  "Tiz"  under 

*Printers  Ink,  May  23,  1912,  p.  80. 


MANUFACTURERS'  PROBLEMS  281 

tribute  by  advertising  such  raw  near-copies  as  "Biz"  or  "Ziz." 
Any  advertiser  who  has  learned  how  easily  the  consumer  is 
confused  can  appreciate  that  Walter  Luther  Dodge,  the  owner 
of  "Tiz,"  began  to  study  with  much  concern  how  he  could 
insure  the  permanency  of  his  business  and  protect  purchasers 
from  substitution. 

Some  years  of  hard  labor  and  over  a  million  dollars  was  spent 
to  build  up  "Tiz."  All  this  was  done  in  a  way  that  created 
absolutely  new  business  for  the  druggists.  After  several 
years'  constant  use  of  the  newspaper  space,  there  came  a  time 
when  the  columns  of  some  newspapers  carried  ads  of  from  three 
to  five  direct  competitors  following  "Tiz"  in  style  of  copy 
and  everything  else.  Most  of  these  imitators  have  seen  the 
futility  of  their  effort  and  dropped  by  the  wayside.  But  they 
made  it  advisable  for  "Tiz"  to  find  a  new  medium  that  would 
not  only  increase  the  business  but  insure  its  permanency 
and  stability,  and  do  this  at  a  reasonable  cost. 

It  was  reasoned  that  prospects  could  be  influenced  at  oppor- 
tune times  by  a  number  of  well-located  bulletins.  For  example, 
clerks,  solicitors,  workmen,  motormen  and  the  like,  on  their 
feet  most  of  the  time,  are  forcibly  reminded  by  their  own  phys- 
ical annoyance  that  relief  is  very  much  to  be  desired.  As 
they  walk  from  their  place  of  business  to  the  cars  and  from  the 
cars  to  their  home,  and  all  along  the  route  of  travel,  they  are 
told  by  these  bulletins  the  big  vital  fact  that  "*Tiz'  Cures 
Sore  Feet."  Right  in  the  prospect's  own  neighborhood, 
close  to  the  very  stores  he  is  accustomed  to  patronize,  he  is 
again  reminded  by  one  of  these  bulletins  or  walls  what  "Tiz" 
will  do  for  him. 

The  forcibleness  and  simplicity  of  the  copy  is  designed  to 
send  him  into  the  store  not  merely  for  a  foot  remedy,  but 
with  the  definite  idea  of  securing  "Tiz." 

A  great  many  of  the  people,  it  was  thought,  read  newspapers 
hurriedly.  It  was  thought  bulletins  would  reiterate  and  em- 
phasize "Tiz"  to  all  the  newspaper  readers. 

After  Mr.  Dodge  devised  the  remedy  he  searched  for  a 
name.  He  first  thought  of  using  the  first  two  letters  of  his 
name,  but  that  was  unsatisfactory.  He  asked  himself  what 
it  was  for  and  wrote  down  the  answer.  "'Tis  for  tender  feet." 
By  changing  it  to  "Tiz"  he  coined  a  word  that  is  short,  dis- 
tinctive, can  be  registered,  and  when  coupled  with  the  words 
"  for  tender  feet "  practically  tells  the  whole  stor3^    So  "Tiz"  it  is. 


282        ADVERTISING  AS  A  BUSINESS  FORCE 

The  try-out  ad  occupied  less  than  an  inch  of  space  in  one  of 
the  mail-order  publications.  Several  years  and  considerable 
money  were  spent  in  trying  to  work  up  a  mail-order  business. 
This  proved  the  value  of  the  name  "Tiz";  the  merit  of  the 
product  and  its  selling  possibilities.  The  percentage  of  repeat 
orders  from  the  mail-order  customers  was  unusually  steady 
and  large.  This  gradually  brought  in  small  voluntary  orders 
from  wholesalers  for  shipments  direct  to  druggists.  One  sale 
usually  resulted  in  subsequent  orders,  demonstrating  positively 
that  Mr.  Dodge  was  justified  in  planning  to  market  "Tiz" 
nationally  through  the  regular  channels  of  trade. 

Indianapolis  was  selected  as  the  test  city  for  a  series  of 
ads  in  the  newspapers.  Results  were  even  greater  than  antici- 
pated. A  month  later  Columbus,  Ohio,  was  added,  then 
followed  Cincinnati  and  Pittsburgh.  History  repeated  itself 
in  each  city. 

Before  that  summer  was  over  Mr.  Dodge  laid  his  plans  for 
advertising  nationally.  Something  of  the  task  involved  can 
be  realized  when  one  knows  that  he  had  no  drug-store  dis- 
tribution, no  established  relationship  with  the  wholesalers, 
no  sales  force,  yet  he  was  contemplating  advertising  in  every 
leading  newspaper  in  the  United  States.  That  meant  work 
and  investment  of  a  great  many  thousands  of  dollars. 

In  less  than  a  year  from  the  time  the  business  was  started  in 
IndianapoHs,  "Tiz"  was  being  advertised  in  nearly  every 
good  daily  and  weekly  newspaper  in  the  United  States.  Dis- 
tribution was  established  everywhere.  Another  year  of  con- 
tinued advertising  saw  "Tiz"  placed  upon  a  permanent  and 
profitable  basis  and  the  hundreds  of  thousands  of  dollars  in- 
vested began  to  show  returns.  Newspaper  advertising  was 
maintained  steadily. 

Then  the  imitators  sprang  up.  It  looked  so  easy,  so  simple; 
but  they  forgot  the  vast  amount  of  preparatory  work  and  the 
heavy  investment  which  came  before  "Tiz"  was  made  one  of 
the  national  advertising  successes. 

These  imitators  have  never  made  enough  headway  to  be  a 
serious  menace  to  "  Tiz  "  or  the  public.  But  with  scores  of  them 
disturbing  the  business  protection  became  advisable.  Tests 
seemed  to  demonstrate  painted  bulletins  and  walls  to  be  the 
logical  medium  for  increasing  the  business  and  preventing 
encroachments  of  imitators. 

The  bulletin  copy  —  five  designs  are  now  used  —  is  made 


MANUFACTURERS'   PROBLEMS  283 

up  of  the  headings  and  illustrations  run  most  extensively  in  the 
newspapers.  This  emphasizes  and  enlarges  all  the  advertising 
and  connects  it  up  in  an  emphatic  way.  It  strengthens  the 
bond  with  the  trade  and  the  public  and  makes  the  asset  of 
good-will  very  much  more  valuable. 

And  this  combination  of  publicity  medium  has,  as  evidence 
shows,  done  much  to  keep  "Tiz"  established  in  the  trade. 

MARKET   PROBLEMS  —  FASHION   AND   ADVERTISING 

One  of  the  manufacturers'  problems  not  covered  in  the 
previous  parts  of  this  discussion  is  the  question  of  fashion  as 
Ad  ert'  '  ^^  bears  on  almost  all  types  of  product  for  human 
Influence  on  wear.  For  many  years  manufacturers  on  this  side 
Fashions  ^^  ^j^^  Atlantic  have  felt  that  they  were  more  or  less 
helpless  in  the  matter  of  control  over  fashions,  but  a  num- 
ber of  experiences  of  manufacturers  in  recent  years  have 
Jed  to  a  distinct  feeling  of  confidence  that  the  appeal  to  the 
consumer  may  be  used  with  good  effect  to  materially  modify 
the  dictates  of  fashion  authorities  of  Europe,  provided  there 
is  an  adequate  basis  for  the  American  appeal  in  the  intrinsic 
merits  of  the  goods.  A  number  of  cases  of  this  kind  are  thus 
described  by  Frank  H.  Holman: 

*A  great  many  manufacturers  are  called  upon  to  face  the 
prospect  of  losing  sales  through  unpopularity  of  the  goods,  based 
in  many  cases  upon  mere  public  whim  or  caprice,  but  none 
the  less  real  on  that  account.  Many  an  automobile  sale  has 
been  lost  or  won  because  of  a  prejudice  in  favor  of  a  driver's 
seat  on  the  left-hand  side  or  a  pair  of  head-lamps  built  flush 
with  the  dash. 

In  the  textile  field  and  among  the  manufacturers  of  dress 
specialties,  public  taste  —  which  we  call  by  the  general  name 
of  fashion  —  has  an  immense  influence  upon  the  sale  of  par- 
ticular goods;  probably  a  greater  influence  than  is  the  case  in 
any  other  line.  For  example,  is  the  making  of  dress  specialties 
—  ranging  all  the  way  from  opera  cloaks  to  silk  fringe  and 
milliner's  accessories  —  a  gamble  dependent  upon  the  whims 

^Printers'  Ink,  June  20,  1912,  p.  3. 


284        ADVERTISING  AS  A  BUSINESS  FORCE 

of  some  designer  in  far-off  Paris,  or  will  the  market  respond 
to  good  merchandising  methods  in  spite  of  a  "tendency" 
against  the  goods?  If  it  is  possible  to  win  out  with  an  article  of 
dress  against  the  strong  tide  of  a  "style  tendency,"  it  should 
be  comparatively  easy  to  overcome  temporary  unpopularity 
with  other  lines  of  goods. 

A  concrete  problem  is  right  now  facing  the  knitting  mills 
which  have  built  up  a  substantial  trade  in  knitted  scarfs  for 
men's  wear.  Will  they  be  obliged  to  turn  their  machinery 
back  to  hosiery  making  when  the  style  changes,  or  can  they, 
by  consumer  advertising  and  dealer  promotion,  keep  the 
goods  on  the  market  and  insure  stability  for  the  style.'* 

The  editor  of  a  string  of  fashion  publications  was  interviewed 
on  the  subject.  His  papers  do  not  go  to  the  consumer  who 
is  to  wear  the  garments,  but  to  the  garment  manufacturer, 
who  looks  to  them  to  tell  him  what  to  make;  hence  these 
publications  must  be  pretty  accurate  on  the  subject  of  styles. 

"It's  all  a  gamble,"  he  said,  "as  much  a  gamble  as  a  horse- 
race. American  buyers  go  over  to  Paris  at  certain  seasons  of 
the  year  and  inspect  the  various  garments  which  are  on  display 
for  the  purpose.  Each  buyer  purchases  samples  which  he 
thinks  will  have  the  strongest  appeal.  The  majority  naturally 
purchase  garments  which  follow  certain  'tendencies'  in  the 
matter  of  design,  trimming,  etc.  That  tendency  represents 
the  'style'  and  the  fellow  who  doesn't  follow  the  majority  and 
buys  garments  which  depart  from  the  tendency  is  likely  to 
get  left." 

The  editor  pointed  to  an  opera  cloak  which  hung  near  his 
desk.  It  was  made  of  heavy  velvet,  but  was  lined  with  cambric 
of  a  bizarre  Oriental  design.  "There's  one,"  he  said,  "which 
didn't  survive.  If  that  could  have  been  pushed  into  style  it 
would  have  created  a  splendid  market  for  that  particular  kind 
of  cambric.     But  it  didn't  'take.' 

"The  manufacturer  of  that  particular  piece  of  goods,"  he 
went  on,  "probably  made  up  from  a  dozen  to  twenty  different 
novelties  in  fabrics,  and  tried  them  out  in  the  same  way. 
If  two  or  three  of  the  lot  met  with  popular  favor  he  was  per- 
fectly satisfied  to  devote  his  energies  to  the  manufacture  of 
those  and  to  forget  the  rest.  The  Parisian  designers  will 
make  up  maybe  a  hundred  different  garments,  and  are  satisfied 
if  a  fifth  of  them  get  across.  Of  course  it's  wasteful,  but  there's 
no  help  for  it." 


MANUFACTURERS'  PROBLEMS  285 

Further  investigation  among  manufacturers  and  jobbers 
of  dress  specialties  disclosed  several  instances  where  manu- 
facturers, by  shrewd  judgment  and  work  along  the  general 
line  of  the  style  tendency,  had  practically  created  a  market 
for  certain  fabrics,  besides  one  instance  in  which  advertising 
had  sold  a  novelty  directly  in  opposition  to  the  style  tendency. 

It  goes  without   saying,  of  course,  that  the   manufacturer 

who  is  ready  when  a  style  comes  in  reaps  the  harvest.     For 

rpj^^       instance,    when   feathers    come   back   into   favor  as 

Advantage  adornments    for    women's    hats  —  they    have    been 

of  the     consigned  to  limbo  for  some  time,  it  is  said  —  that 

Longest  feather  manufacturer  who  can  sense  the  change 
ision  fartliest  in  advance  will  enjoy  a  considerable  advan- 
tage over  his  competitors.  But  it  isn't  always  necessary  to 
wait  until  the  style  is  clear  in;  a  little  judicious  pushing  will 
sometimes  help  it  get  in. 

A  manufacturer  of  Turkish  toweling  —  a  prosaic  enough  fabric 
—  noticed  several  hats  in  a  Fifth  Avenue  window  one  day 
in  the  trimming  of  which  toweling  had  been  used.  That  was 
enough  to  set  him  wondering  whether  it  would  not  be  possible 
to  extend  the  use  of  the  material  still  further.  So  he  instructed 
a  friendly  buyer,  then  starting  on  his  annual  trip  to  Paris,  to 
cable  him  instantly  if  there  was  the  least  sign  which  might 
be  constructed  as  a  tendency  toward  the  use  of  toweling. 
The  buyer  found  a  few  garments  in  which  toweling  was  used 
sparingly  as  a  lapel  facing.  He  cabled  the  manufacturer  to 
that  effect,  and  received  an  order  to  buy  every  garment  he 
could  lay  his  hands  on  in  which  the  material  was  used. 

Meanwhile  the  manufacturer  started  to  make  toweling  far 
in  excess  of  any  orders  he  had  on  hand,  and  started  his  salesmen 
to  talking  up  the  new  styles  among  the  trade.  He  had  a 
handsome  stock  of  the  fabric  laid  away  in  his  warehouse  by  the 
time  his  competitors  got  wind  of  what  was  happening.  The 
model  garments  which  had  been  bought  to  his  order  in  Paris 
were  displayed  to  the  ready-made  garment  manufacturers  in 
New  York,  and  were  featured  in  the  publications  for  the 
cutting-up  trade.  The  demand  for  toweling  ran  so  far  ahead 
of  the  supply  that  the  price  rose  from  around  50  cents  to  a 
$1.25  a  yard. 

The  vogue  for  polo  cloth  last  winter  tied  several  bowknots 
in  the  producing  end  of  the  business,  and  at  one  time  during 
the  season  it  was  almost  impossible  to  obtain  polo  cloth  from 


286        ADVERTISING  AS  A  BUSINESS  FORCE 

the  mills.  Just  at  that  time  a  garment  manufacturer  went 
to  his  cloth  manufacturer  and  begged  for  enough  of  the  cloth 
to  make  up  orders  then  on  hand.  The  mill  couldn't  supply 
it,  but  they  had  in  a  warehouse  a  lot  of  chinchilla  —  a  fabric 
with  a  rough  texture  something  like  polo  cloth,  only  more  so  — 
which  they  hadn't  been  able  to  sell  because  it  wasn't  in  style. 
They  offered  the  manufacturer  this  cloth  at  a  low  figure,  and 
he  took  it.  He  had  nerve  enough  to  make  up  a  sample  line  of 
smart  chinchilla  coats,  fashioned  on  the  well-known  polo 
model.  It  is  stated  that  six  calls  upon  retailers  were  enough 
to  start  the  new  garment  going,  and  that  particular  manu- 
facturer is  said  to  have  cleaned  up  $40,000  on  the  one  line. 

What  the  textile  mill  cleaned  up  because  of  its  ability  to 
sense  the  possible  demand  for  coats  of  a  still  rougher  material 
than  polo  cloth  isn't  stated,  but  it  was  considerable.  There 
hadn't  been  any  demand  for  chinchilla  in  a  long  time;  wasn't 
any  prospect  of  one  in  the  making,  and  competitors  had  nat- 
urally dropped  the  fabric.  For  one  hold-over  stock  of  chin- 
chilla represented  the  entire  supply. 

Those  two  instances  show  what  can  be  done  by  following 
the  general  tendency  of  fashion,  and  accentuating  certain 
aspects  of  it.  But  it  is  quite  possible  to  create  a  demand  for 
an  article  of  dress  which  is  not  in  line  with  the  general  style 
tendency  at  all. 

A  jobber  with  headquarters  in  Lyons,  France,  and  an  active 

branch  organization  in  New  York  had  built  up  a  substantial 

trade  for  Dynamo  Maline,  a  thin  silk  fabric  much 

Creating  ^gg^^  f^j.  trimming.  That  is  to  say  it  was  much 
for  MaUne  ^^^^  ""^^^  about  a  year  ago,  when  the  bottom  fell 
out  of  the  maline  market.  It  simply  w^asn't  in 
style,  that  was  all.  The  feminine  passion  for  straight  lines, 
or  the  hobble  skirt,  or  something  else  —  it  doesn't  matter 
what  —  had  put  maline  beyond  the  pale,  and  the  dealers 
simply  wouldn't  touch  it. 

The  proprietors  of  the  brand,  however,  were  not  satisfied 
to  let  maline  wait  for  the  style  to  come  back.  The  New  York 
branch  of  the  concern  thought  that  it  would  be  better  to  spend 
a  little  money  in  the  endeavor  to  create  a  demand  for  the 
fabric  than  to  face  the  prospect  of  securing  distribution  all 
over  again  at  some  future  date  as  yet  unknown.  The  feminine 
appeal,  of  course,  was  essential,  and  the  concern  very  wisely 
chose  a  woman  to  tell  them  what  it  was. 


MANUFACTURERS'  PROBLEMS  287 

This  lady  —  who,  by  the  way,  is  connected  with  a  New  York 
advertising  agency  —  made  a  prehminary  survey  of  the  field 
by  "shopping  'round"  among  the  stores,  asking  for  maline 
and  making  inquiries  as  to  why  it  was  not  forthcoming.  The 
concern  was  quite  right;  the  demand  wasn't  there. 

The  means  adopted  for  creating  a  demand  was  a  modified 
sampling  offer  direct  to  the  consumer,  using  large  space  in  a 
list  of  women's  publications.  Essentially  it  was  not  maline 
which  was  being  advertised,  but  a  certain  article  of  adornment 
—  a  butterfly  bow  —  which  could  best  be  made  from  the 
goods.  An  attractive  photograph  of  a  girl  with  the  bow  in 
her  hair  was  run,  and  the  ad  offered  to  send  enough  material 
for  the  bow,  together  with  directions  for  making  it,  for  twelve 
cents  and  a  dealer's  name.  It  is  stated  that  more  than  ten 
thousand  samples  were  sent  out,  mostly,  of  course,  to  young 
women  and  girls. 

The  samples  of  maline  were  wrapped  around  a  cardboard 
reel  on  which  were  printed  directions  for  making  the  bow. 
Moreover,  alongside  the  directions,  the  card  bore  the  adver- 
tisement which  carried  the  campaign  one  step  further.  A 
neck  scarf  was  illustrated  as  worn  by  the  same  attractive 
young  lady,  and  the  recipient  was  told  how  a  scarf  softened 
the  lines  of  the  face,  brought  out  the  contours,  etc.  Only  five 
yards  of  maline,  the  card  said,  were  necessary  to  make  the  scarf. 
This  demand  was  directed  to  the  local  dealer,  with  a  provision 
that  the  goods    might  be  purchased  direct  if  not  in  stock. 

For  older  women,  of  more  conservative  tendencies,  the 
sampling  offer  was  repeated  with  a  simple  neck-bow,  as  the 
entry.  To  prevent  duplication  as  much  as  possible,  this  bow 
was  offered  only  in  black. 

The  millinery  trade  was  reached  by  a  similar  plan,  illus- 
trating a  hat  trimmed  with  a  jaunty  bow  of  maline  and  carrying 
the  endorsement  of  a  Fifth  Avenue  milliner. 

Altogether  upward  of  thirty  thousand  inquiries  were  received, 
most  of  which  included  a  dealer's  name.  Those  names  were 
sorted  according  to  jobbing  territories  outside  of  New  York 
City,  and  displayed  to  the  jobbers'  representatives,  on  their 
winter  trip  to  the  metropolis.  This  evidence  of  interest, 
combined  with  the  demand  on  the  dealers  occasioned  by  the 
five-yard  scarf  offer,  resulted  in  a  thorough  stocking  of  the 
line  by  the  jobbing  trade,  including  many  jobbers  who  had 
not  hitherto  carried  the  line. 


288        ADVERTISING  AS  A  BUSINESS  FORCE 

So,  taking  it  altogether,  it  does  not  look  as  though  a  manu- 
facturer was  utterly  helpless  in  the  face  of  an  adverse  ruling  in 
the  style  sheets.  It  takes  a  lot  of  courage  and  some  outlay 
of  capital  to  run  counter  to  the  fashion,  or  to  anticipate  it, 
but  that  is  better  than  allowing  a  stock  of  material  to  eat  its 
head  off  in  the  warehouse  or  discontinuing  the  line  with  the 
possibility  that  some  competitor  may  be  forehanded  when  it 
"comes  in"  again.  Right  now  the  manufacturers  of  ribbons 
are  boosting  the  demand.  The  ultimate  end  in  view  is  said 
to  be  a  vogue  of  sashes,  and  it  is  predicted  that  it  will  come 
along  in  the  late  summer.  Just  now,  however,  the  ribbon 
men  are  beginning  at  an  easy  stage,  with  baby  ribbons  in 
combination  with  lace  trimming.  The  wider  ribbons  will  fol- 
low along  naturally. 

SELLING   POLICY   AND   ADVERTISING   PLANS 

The   selling   policy   of    the   manufacturer   is   the    problem 

which  is  most  intimately  associated  with  the  determination 

of  the  character  of  the  advertising  plans.     Whether 

fadurers    the  manufacturer  adopts  the  "regular,"  or  the  "new" 

Selling  outlets  to  the  retailer;  whether  he  puts  out  his  goods 
through  a  selling  company,  through  agencies,  through 
his  own  branch  stores,  or  by  mail,  the  choice,  once  made,  deter- 
mines in  a  measure,  the  main  features  of  his  advertising  plan. 

For  instance,  in  January  1912,  it  was  announced  that  the 
Rogers  Thompson  Givernaud  Company,  of  New  York,  creators 
of  Rajah  silks  and  a  number  of  other  trade-marked  brands, 
had  decided  to  go  into  a  direct  selling  plan*  by  which  they 
were  to  establish  a  retail  silk  store  in  New  York  City.  As  far 
as  their  advertising  was  concerned  this  put  them  on  an  entirely 
new  basis  from  that  which  they  had  formerly  occupied  as 
distributors  through  the  jobbing  trade.  When  in  the  summer 
of  1912f  they  announced  that  they  had  decided  to  go  back 
to  distribution  via  the  jobbing  trade,  it  is  perfectly  clear  that 
once  more  the  advertising  policy  was  changed,  and  that  after 

*Printers'  Ink,  February  1,  1912,  p.  60. 
'\Printers   Ink,  August  22,  1912,  p.  46. 


MANUFACTURERS'   PROBLEMS  289 

the  two  changes  the  company  was  no  longer  in  the  same  position 
as  an  advertiser  which  it  occupied  originally.  They  must  now 
win  back  the  support  of  the  jobbing  trade. 

Another  illustration  of  the  same  disturbance  of  the  relations 
between  the  advertising  and  the  manufacturing  plans  is  found 
in  the  case  of  the  Kentucky  Wagon  Company  which,  in  January 
1911,  announced*  that  it  was  going  to  abandon  the  regular 
dealer  system  of  distribution  of  its  products  and  was  going 
to  sell  its  wagons  to  the  farmers  directly  on  a  mail-order  basis. 
In  April  of  the  same  year  the  company  announcedf  that  it 
was  going  back  to  the  dealers,  and  again  it  was  clear  that 
the  two  changes  in  selling  plan  involved  two  changes  in  the 
advertising  policy  of  the  company  to  correspond  with  the 
methods  of  doing  business.  This  problem  of  adjusting  adver- 
tising plans  to  methods  of  distribution  is  an  immense  one  and 
will  repay  careful  study.     (See  also  Chapters  I  and  X.) 

REVIEW   QUESTIONS  —  CHAPTER   IX 

1.  What  is  the  purpose  of  the  Fairbank  letter  to  its  sales 
staff.? 

2.  How  does  the  Sherwin-Williams  Company  keep  the  factory 
output  in  touch  with  the  sales  conditions.'* 

3.  What  are  some  of  the  advertising  uses  of  information 
about  the  factory.'' 

4.  What  are  the  main  points  in  the  development  of  vacuum 
cleaner  advertising.'* 

5.  In  what  ways  do  advertised  goods  need  protection  on  the 
market? 

6.  How  can  "fashions"  be  influenced  by  advertising? 

PROBLEM   QUESTIONS  —  CHAPTER   IX 

1.  From  the  standpoint  of  the  advertising  manager  would 
you   say   the   problems   of   vacuum   cleaner  advertising  were 

*Prinfers  Ink,  February  23,  1911,  p.  60. 
^Printers    Ink,  July  27,  1911,  p.  31. 


290        ADVERTISING  AS  A  BUSINESS  FORCE 

easier    or    more    difficult    than   they   were   five   years   ago? 
Why? 

2.  If  you  controlled  the  patents  on  a  new  kitchen  specialty 
retailing  for  25  cents  and  had  $10,000  for  a  publicity  campaign, 
how  would  you  go  about  getting  the  article  on  the  market? 

3.  An  advertising  agent  has  laid  before  one  of  the  largest 
textile  mills  in  New  England  a  plan  for  a  national  advertising 
campaign  involving  an  outlay  of  $500,000  spread  over  three 
years.  The  manufacturer  has  responded  with  an  appropriation 
of  $10,000  for  a  local  trial  of  the  same  plan.  Discuss  the  value 
of  the  results  of  such  a  test  as  a  measure  of  the  merits  of  the 
main  plan. 


CHAPTER  X 

ADVERTISING  AND  SELLING  CO-ORDINATION 

IN  OUR  first  chapter  we  made  the  point  that,  ordinarily, 
advertising  results  are  expected,  sooner  or  later,  to  take 
the  form  of  increased  profits  and  that  increased  profits  are 
secured  by  means  of  either  more,  or  more  profitable,  sales. 

In  the  chapters  since  the  first  we  have  examined  some  fea- 
tures of  the  existing  mechanism  for  making  sales. 

This  distribution  system  is,   at  best,   only  a  machine  for 
giving  effect  to  a  power  which  works  through  it.     The  selling 
of  goods  is  the  function  for  which  the  whole  mechanism  exists, 
and  so,  through  all  the  work  of  this  mechanism,  whether  whole- 
sale or  retail,  the  force  which  makes  it  effective  is  salesmanship. 
Production  by  factory  methods  is  mere  repetition.     No  two 
sales  are  exactly  alike.    Production  methods  may  be  completely 
standardized.       Selling    methods   always   must  allow  for  the 
human  element.     With  a  manufacturing  process  once  devised, 
if  there  be  a  suflBcient  supply  of  capital,  raw  materials  and 
working  force,  proper  machinery  and  efficient  administrative 
methods,  there  is  no  reason  why  production  cannot 
7s  an     be  extended  almost  indefinitely.      The  making  of  a 

Individual  million  articles  adds  few  difficulties  not  experienced 
Transaction.        ,  .      ,  -r.    .        n-         •      •    j- 

m  the  makmg  oi  a  smgle  one.      Jout  selnng  is  mdi- 

vidual.     Each  sale  finally  springs  out  of  the  decision  of  some 

individual  will. 

Newspapers  may  be  printed  at  the  rate  of  10,000  an  hour. 

The  production  may  be  kept  up  indefinitely,  but  each  paper 

sold    represents    an    individual    transaction.     The    customer 

must  be  in  the  right  mood;  he  must  have  the  effective  desire 

£91 


292        ADVERTISING  AS  A  BUSINESS  FORCE 

for  even  so  small  a  purchase.  The  merchant,  whether  he  be 
a  newsboy  or  a  news-stand  operator,  must  present  his  goods 
at  an  opportune  time  through  some  effective  method  of  ap- 
proach. 

The  problems  of  salesmanship,  while  thus  strictly  individual, 
are  by  no  means  incapable  of  some  degree  of  standardization, 
and  a  few  concerns  have  begun  to  appreciate  the  possibilities 
of  betterment  in  this  side  of  business  activity. 

The  classic  instance  of  a  successful  organization    of   sales 

department  combined  w^tli  standardization  of  sales  methods 

is  the  National  Cash  Register  Company. 

Organiza-       This  concern,   making  a  high-priced  specialty,  is 

tion  of  the  even  more  dependent  upon  the  efficiency  of  its  sales 

Cash      force  than  are  most  manufacturers.     The  goods  are 

Register    obliged  to  create  their  own  demand.    There  are  com- 
paratively few,  of  those  to  whom  they  are  to  make 
their  appeal,  who  can  see  at  a  glance  the  possibilities  of  the 
machine  and  the  benefits  to  be  derived  from  its  introduction. 

The  stimulation  of  the  sales  work  of  this  company  dates 
back  to  the  World's  Fair  in  Chicago  in  1893.*  At  that  time 
the  concern  made  its  first  important  public  exhibition  of  cash 
registers,  and  it  had  this  exhibition  in  the  hands  of  demon- 
strators drawn  from  its  sales  force.  The  president  of  the 
company  visited  the  exhibit  and  found,  upon  listening  to  the 
demonstrations  given  by  its  representatives,  that  there  was 
not  only  a  wide  divergence  in  the  character  of  the  demonstration 
given,  but  that  the  percentage  of  inefficiency  in  these  demon- 
strations was  very  large.  Many  of  the  salesmen  apparently 
failed  entirely,  or  in  a  very  large  measure,  to  grasp  the  possi- 
bilities of  the  machine  and  to  bring  out  its  best  points.  As  a 
result,  the  president  took  in  hand  the  training  of  the  demon- 
strating force  and,  in  addition  to  giving  them  detailed  lessons 
as  to  how  to  demonstrate,  he  prepared  a  pamphlet  of  standard 


*Printers  Inl;  June  28,  1911,  p.  3;    July  6,  1911,  p.  3;  July  13,  1911,  p.  17; 
July  20,  1911,  p.  17;  July  27,  1911,  p.  34;  August  24,  1911,  p.  9. 


CO-ORDINATION  293 

arguments    and    descriptions    and    required    those    who    were 

in  charge  of  the  exhibition  to  memorize  this  pamphlet  and  to 

base  their  demonstrations  on  the  arguments  which  it  contained. 

After  the  Fair  was  over,  the  question  arose  in  the  president's 

mind   as   to  whether  his   sales  force  was,  on  the  whole,  any 

more  efficient  than  he  had  found  the  demonstrators 

Selling     at  the  exhibition  to  be,  and  it  occurred  to  him  that 

Was  Sys-  ^j^jg  jjj^pj,  q£  effectiveness  might  offer  a  solution  for 

lemafizcd     ,        „   .,  „     ,  >      i       • 

the  failure  of  the  company  s  busmess  to  expand  at 

the  rate  he  had  expected.  As  a  result  of  this  question  in 
his  mind,  the  president  and  the  head  of  his  sales  depart- 
ment undertook  a  series  of  tours  over  the  country  for  the 
purpose  of  visiting  different  sales  offices.  The  branches 
were  entered  by  the  two  representatives  of  the  house,  either 
with  or  without  the  knowledge  of  the  agent,  and  an  inspection 
was  made  of  the  premises,  and  a  careful  test  was  engaged  in, 
designed  to  cover  the  selling  ability  of  each  member  of  the 
sales  force.  On  some  trips  an  elocutionist  was  taken  along 
for  the  purpose  of  criticising  the  address  and  the  superficial 
sales  methods  of  the  salesmen.  After  these  tours  had  continued 
for  some  months,  the  results  obtained  were  tabulated  and 
put  before  the  selling  force  of  the  company  in  the  form  of  a 
series  of  articles  and  pamphlets  written  by  the  head  of  the 
house.  The  tangible  results  of  this  examination  were  two: 
first,  a  partial  attempt  at  standardizing  the  selling  methods 
throughout  the  company's  system  of  sales  branches;  and 
second,  the  publication  of  an  "Argument  Primer,"  which  was 
designed  to  do  for  the  sales  force  what  the  previous  pamphlet 
had  done  for  the  demonstrating  force  at  the  Chicago  Fair. 
The  salesmen  at  first  were  asked  to  use  it;  but  as  a  result  of 
the  small  number  adopting  the  suggestion,  attempts  were  made 
to  persuade  them  to  employ  this  help  in  their  sales  operation. 
This  failing  in  turn,  the  memorizing  of  the  primer  was  made 
a  condition  of  continued  employment  in  the  company,  and  it 
was  announced  that  all  salesmen  who  declined  to  memorize 


294        ADVERTISING  AS  A  BUSINESS  FORCE 

the  pamphlet,  or  were  unable  to  do  so,  were  to  be  eliminated 
from  the  sales  force. 

The  training  method  thus  inaugurated  has  been  expanded 
from  year  to  year,  until  now  the  sales  organization  of  this 
company  is  regarded  as  an  example  of  the  most  extreme  attempt 
to  standardize  the  selling  of  goods.  The  company  now  main- 
tains a  regular  salesman's  school  with  a  full  set  of  courses 
covering  such  subjects  as,  the  nature  and  uses  of  cash  registers, 
business  systems  in  use  in  the  different  parts  of  the  country, 
interviewing  methods,  explaining  methods,  methods  of  conduct- 
ing an  agency,  closing  arguments,  selling  points,  and  a  wide 
group  of  subjects  bearing  on  personal  and  ethical  topics  of 
value  to  a  salesman.  Training  in  this  school  is  required  of 
all  salesmen,  and  promotions  into  the  selling  force,  made  from 
the  ranks  of  the  employees  of  the  company  not  connected  with 
the  sales  department,  are  made  only  after  the  course  has  been 
taken. 

A  second  feature  of  the  present  system  of  training  for  sales- 
men is  the  Sales  Manual,  which  is  the  outgrowth  of  the 
The  Uses  Primer  which  was  originally  employed.  This  Man- 
of  the  Sales  \xal  has  gone  through  several  editions.  The  Manual 
"""  is  designed  to  contain  concise  instructions  to  the 
salesmen  as  to  their  conduct  and  methods  in  almost  every 
conceivable  circumstance.  The  salesman  is  required  to  know 
the  entire  book  thoroughly.  The  four  main  heads,  in  the 
present  form  of  the  Manual,  are:  (1)  Salesmanship;  (2)  Ap- 
proach; (3)  Demonstration;  (4)  Closing  Arguments;  and  under 
these  heads  are  grouped  arguments,  objections,  and  answers 
taken  from  the  experience  of  the  salesmen  employed  by  the 
company. 

A  third    feature  of    the    company's    sales-training   equip- 

fj^g  ment  is  what  is  known  as  the  100-Point  Club,  which 
lOO-Point  is  designed  to  stimulate  an  interest  in  the  volume 
of  the  sales  of  individual  salesmen,  thus  adding  en- 
thusiasm   to    the  other  incentives  given  to  increase  sales. 


CO-ORDINATION  295 

Any  salesman  who  sells  $2,500  worth  of  cash  registers 
each  month  for  twelve  months  is  entitled  to  membership  in 
this  club  for  the  year  in  which  his  sales  are  made,  and  the 
membership  in  the  club  is  not  only  very  much  sought  after 
as  an  honor,  but  has  certain  substantial  rewards  as  well.  The 
selling  system  has  responded  very  quickly  to  this  method  of 
stimulation. 

Shading  away  from  the  highly  eflBcient  type  of  sales  organiza- 
tion represented  by  that  of  the  National  Cash  Register  Com- 
pany, there  are  to  be  found  types  representing  all  degrees  of 
intelligence  until  we  finally  reach  the  type  of  concern  which 
depends  entirely  on  a  selling  force  recruited  by  accident  and 
securing  business  through  its  "natural  born"  qualifications. 

The  feature  of  the  problem  of  sales-force  organization  which 
particularly  appeals  to  us  in  this  discussion  is  the  question: 
How  is  the  sales  force,  either  good  or  bad,  to  be  co-ordinated 
with  the  advertising  activities? 

Consideration  of  this  question  soon  shows  us  that  it  has  two 
distinct  parts:  (1)  How  is  this  co-ordination  to  be  brought 
about  in  the  actual  operations  of  selling  and  advertising.? 
and  (2)  How  are  these  two  separate  departments  to  be  organized 
so  as  to  be  administered  without  conflict.''  One  part  deals 
with  co-ordination  "on  the  road,"  where  the  sales  are  made, 
and  the  other  deals  with  co-ordination  "in  the  office,"  where 
the  sales  are  planned. 

CO-ORDINATION  "  ON  THE  ROAD  " 

Leaving  the  question  of  office  organization  for  the  moment, 
let  us  examine  one  or  two  cases  of  co-ordination  in  actual 
operation. 

We  have  already  seen  (page  265)  how  the  National  Cash 
Register  regards  its  advertising  activities  and  how  frequently 
the  heads  of  the  sales  force  are  called  into  consultation  in 
matters  of  advertising  policy.  This  illustrates  one  phase  of 
the  problem.     It  is  typical  of  this  company's  methods. 


296        ADVERTISING  AS  A  BUSINESS  FORCE 

The  American  Multigraph  Sales  Company,  makers  of  the 
"  Multigraph"  light  printing  device,  has  had  particular  success 
in  its  efforts  to  secure  co-ordination  between  the  advertising  and 
selling  departments.  Some  of  the  methods  employed  in  this 
work  are  told  in  the  following  terms  by  Tim  Thrift,  adver- 
tising manager  of  the  company,  in  a  series  of  articles  copy- 
righted by  the  Printers'  Ink  PubHshing  Company: 

*A  little  over  two  years  ago  a  change  was  made  in  the  sales 
management  of  The  American  Multigraph  Sales  Company. 
For  eighteen  months  before  that  time  there  had  been  no  adver- 
tising manager.  The  then  sales  manager  and  advertising 
manager  could  not  pull  in  double  harness.  The  advertising 
manager  quit.  A  successor  was  not  appointed  during  the 
remainder  of  that  sales  manager's  connection  with  the  company. 

The    new   sales   manager   looked   at   things    in   a   different 

light.     He  believed  that  the   business  required  an  advertising 

executive  as  well  as  a  sales  executive;   that  perfect 

Teain     team  work  between  the  two  was  essential  and  pos- 

Advertisin  •^^'^^^'  ^^^^  ^^^  ssiXes  manager  should  be,  in  a  sense, 

a,j(^       assistant    advertising    manager   and  the  advertising 

Selling  manager  assistant  sales  manager;  that  with  the  work 
of  each  clearly  defined  there  should  be  no  confusion, 
and  that  with  this  kind  of  a  working  arrangement  the  busi- 
ness would  develop  as  never  before. 

The  writer  became  advertising  manager  shortly  after  the 
change  in  sales  managers.  His  ideas  of  co-operation  between 
the  sales  and  advertising  departments  coincided  with  the 
new  sales  manager's. 

To  show  the  working  arrangement  between  these  depart- 
ments of  The  American  Multigraph  Sales  Company,  and  how 
much  further  the  advertising  department  goes  in  assisting 
the  sales  department  than  most  advertising  departments,  is 
the  object  of  this  series  of  articles. 

Let  it  be  understood,  however,  that  while  the  activities 
of  the  advertising  department  as  they  will  be  outlined  may 
seem  to  extend  more  in  the  sales  end  than  the  actual  advertising 
end  of  the  work,  this  is  not  the  case.  The  advertising  manager 
is  no  less  advertising  manager  • —  his  services  in  this  respect 

"Printers'  Ink,  May  30,  1912,  p.  3. 


CO-ORDINATION  297 

being  similar  to  those  of  any  advertising  executive  of  a  large 
corporation.  But  the  point  to  be  made  is  the  extension  of 
his  field  of  activities  and  his  close  relationship  with  the  sales 
manager  in  sales  work. 

With  the  beginning  of  the  new  regime  a  series  of  sales  con- 
tests was  started.  The  origination,  as  well  as  the  de- 
^ales  \q\\^  of  carrying  out  these  contests,  was  left  to  the 
Begun  advertising  manager.  Each  month  he  submitted  his 
suggestions  to  the  sales  manager  and  a  conference  was 
held  on  them. 

In  order  that  the  advertising  manager  might  be  kept  fully 
informed  on  the  progress  of  sales,  he  was  given  the  same  weekly 
sales  reports  that  the  general  sales  manager  received,  and 
made  acquainted  with  all  conditions  in  the  field.  It  was 
realized  at  the  outset  that  unless  he  was  fully  informed  on  all 
sales  conditions  he  could  not  thoroughly  analyze  them. 

An  important  help  in  the  contest  was  a  house-organ  con- 
ducted in  rather  an  unusual  manner.  This  feature  of  the  work 
will  be  taken  up  later.  At  this  time  we  will  concern  ourselves 
only  with  the  various  contests  and  how  they  were  carried  on 
so  as  to  secure  the  exceptional  results  which  are  secured. 

Before  there  could  be  contests,  however,  it  was  necessary 

that  some  basis  for   figuring    individual   sales  be    arrived  at. 

This  was  a  problem  which  presented  many  perplexities. 

Figuring  Yqy  instance,  the  business  was  not  old  enough  to  pre- 

Sales  determine  the  possible  business  to  be  expected  from  a 
given  territory,  based  upon  the  possible  users  of  the 
products  in  that  territory,  either  as  a  unit  or  by  vocations.  The 
systems  of  other  concerns  in  the  office  appliance  field  were 
carefully  studied  along  this  line,  but  they  oflFered  little  real 
help. 

Finally  it  was  decided  to  take  the  total  sales  of  each  man 
for  a  year  back,  find  the  average  monthly  sales,  and  then  make 
individual  quotas,  based  upon  a  fair  and  equitable  estimated 
increase;  which  increase  was,  in  turn,  based  on  a  careful  investi- 
gation of  general  business  conditions  and  the  volume  of  busi- 
ness being  done  in  principal  commodities  in  various  sections  of 
the  country. 

This  method  was  naturally  somewhat  crude,  and  it  was 
appreciated  that  mistakes  would  show  up,  but  a  start  had  to 
be  made  somewhere  and  the  plan  really  worked  out  very  well. 
Later  on  better  statistics  were  available  and  the  quotas  could 


298        ADVERTISING  AS  A  BUSINESS  FORCE 

be  figured  much  more  accurately,  so  that  to-day  there  is  practi- 
cally no  dissatisfaction  with  the  quotas  as  given  out  for  the 
ensuing  year. 

The  company  has  sixty  division  and  branch  offices.      In  the 

matter  of  quotas,  branch  office  managers  were  classed  the  same 

as  salesmen.     Thus  there  were  two   general   classes 

The       q£   sales   quotas  —  those   given    division    ofiices    for 

Sustem  total  division  business,  and  those  given  salesmen  for 
individual  business.  The  division  office  quotas  were 
arrived  at  in  the  same  manner  as  the  salesmen's  quotas. 

The  salesmen  were,  however,  divided  again  into  three  general 
classes,  according  to  ability  —  each  representing  a  fixed  amount 
of  business  per  month.  The  amount  for  the  minimum  class, 
for  instance,  was  $1,500  and  so  on  up  through  the  other  classes. 

The  contests  were  then  based  on  the  per  cent,  of  the  quota 
made  by  each  division  office  or  salesman.  For  example,  the 
ofiice  making  the  highest  per  cent,  of  its  quota  for  any  particular 
month  in  which  a  contest  was  on  won  the  prize  then  offered, 
the  same  going  to  the  division  manager.  The  salesman  making 
the  highest  per  cent,  of  his  quota  received  the  prize  individually. 

During  the  first  year  it  was  discovered  that  many  of  the 
divisions  and  salesmen  were  running  a  considerably  higher 
per  cent,  of  their  quota  than  was  at  first  thought  possible. 
These  were  therefore  marked  for  a  change  in  their  quota  at 
the  end  of  the  time  limit.  In  only  one  or  two  cases  was  it 
found  that  the  quota  was  started  off  too  high  to  give  the  office 
or  salesman  a  chance  at  the  prizes. 

Only  actual  business  was  figured,  and  the  figures  were  based 
on  the  orders  themselves,  except  in  the  case  of  distant  ofiices, 
when  a  telegraphic  report  was  accepted,  to  be  confirmed  later. 
Thus  there  was  little  chance  for  error. 

Reports  on  the  previous  week's  sales,  with  the  resulting 
standings,  were  published  on  the  following  Friday.  At  first 
the  percentage  of  the  quota  made  was  given  for  each  office 
and  salesman,  but  later  this  was  changed  and  the  position 
alone  indicated.  Whenever  an  office  or  salesman  made  100 
per  cent,  of  the  quota  a  star  was  given,  and  for  each  hundred 
added  another  star  given.  This  made  keen  rivalry  to  get 
in  the  star  class  as  early  in  the  month  as  possible. 

The  first  sales  contest  was  for  the  first  six  months  of  1911. 
This  period  was  divided  into  two  cjuarter  periods.  The  fol- 
lowing prizes  were  put  up:     To  the  division  manager  making 


CO-ORDINATION  299 

the  highest  per  cent,  of  his  quota  for  the  entire  period,  $200 
in  cash,  or  a  diamond,  or  set  of  dining-room  furniture  of  equal 
value;  to  the  salesman  making  the  next  highest  per  cent,  a  $150 
Howard  watch  or  a  silver  service  of  equal  value. 

Each  manager  or  salesman  making  his  full  quota  for  the  first 
three  months  received  a  pair  of  gold  cuff  links,  and  for  the  second 
three  months  a  watch  fob  with  his  initials  cut  on  it.  Thus, 
in  addition  to  the  big  prizes,  it  was  possible  to  win  lesser  prizes 
by  simply  making  100  per  cent,  or  better  of  the  quota  for  three 
months  and  six  months. 

Beginning  with  March,  slogans  were  adopted  for  each  month. 

In  March  the  slogan  was,  "Forward  March  for  Record  Busi- 
ness"; in  April,  "A  Record  Shower  of  Business";  in  May, 
"Not  We  May  Gain  in  May,  but  We  Will,"  and  in  June,  "  We 
Must  Can  May  Records." 

Copies  of  these  slogans,  for  framing,  were  furnished  each 
office  every  month  and  these  were  placed  in  a  conspicuous  place 
where  they  would  be  seen  each  day  and  have  a  silent  influence. 

In  April  and  June  special  stunts  were  worked.  The  first 
one  —  which  was  used  in  April  —  was  a  "pledge"  plan.  The 
pledge  is  reproduced  on  this  page. 

This  pledge  was  sent  out  in  duplicate.     One  was  signed  by 

each   manager   and   salesman   and   returned   to  the 

The      liome  office.     The  other  was   retained.     As  fast  as 

Pledge  ^^^  signed  pledges  came  in  the  names  were  put  on  the 
"Honor  Roll"  in  the  house-organ  and  a  lapel  button, 
reading,  "I  Have  Taken  the  Pledge,"  sent  to  each  man.* 

This  button  attracted  a  great  deal  of  favorable  attention. 
It  always  required  some  explanation.  Prospects,  hearing 
of  the  contest,  were  drawn  into  participation  in  it  through 
their  inherent  love  for  anything  that  smacked  of  a  fight.  Busi- 
ness came  rolling  in.  The  month  closed  with  many  quotas 
made  and  others  showing  a  higher  percentage  than  before. 
In  fact,  a  new  record  was  established  for  April  business,  beating 
any  previous  April  by  more  than  30  per  cent. 

Now  the  psychology  of  it.  A  pledge  is  a  sacred  thing. 
To  take  a  pledge  means  assuming  a  certain  moral  obligation. 


*The  wording  of  the  Quota  Pledge  was  as  follows :  I  do  solemnly  PLEDGE  that 
I  will  make  my  Quota,  or  more,  for  the  month  of  April,  in  the  Year  of  Broken 
Records,  Nineteen  Hundred  and  Eleven,  so  help  me  hard  work,  enthusiasm, 
co-operation  and  initiative.  It  is  imderstood  that  I  am  not  exempted,  however, 
from  becoming  reasonably  intoxicated  with  joy,  happiness,  or  success. 


300        ADVERTISING  AS  A  BUSINESS  FORCE 

Few  men  take  any  sort  of  a  pledge  lightly.  While  the  pledge 
in  this  instance  was  semi-humorous,  it  caught  the  fancy  of 
the  men,  and  they  were  glad  to  enter  into  the  spirit  of  the  thing. 

In    June    the    stunt    was    totally    different.       The    general 

sales  manager  went  on  his  annual  vacation.     The   day  after 

he  left  the  sales  reports  for  the  first  two  weeks  of 

"s^dlin^    the    month   came   in    to   the   advertising    manager. 

Scker^  They  were  rather  disheartening,  for  the  figures 
showed  that  the  sales,  despite  the  contest,  were  far 
behind  the  same  month  the  previous  year  and  the  month 
before  of  that  year.     Something  had  to  be  done. 

A  "Surprise  Party"  was  determined  upon.  That  night 
a  lettergram  went  to  each  division  and  branch  manager,  giving 
a  brief  outline  of  the  idea  and  offering  the  suggestion  that  the 
boys  surprise  their  general  sales  manager.  It  warned  them  to 
be  on  the  lookout  for  a  special  issue  of  the  company's  house- 
organ  which  would  explain  the  plan  in  detail. 

Two  days  later  the  special  followed.  It  suggested  to  the 
men  that  this  was  an  opportune  time  to  show  the  general  sales 
manager  what  they  thought  of  him.  It  contained  signed 
articles  from  both  the  advertising  manager  and  the  assistant 
general  sales  manager.  The  following  extracts  from  the 
"Surprise  Party  Edition"  will  give  some  idea  of  the  way  the 
support  of  the  men  was  solicited : 

General  Sales  Manager  Jared  is  away  on  his  vacation.  He  won't  be  back 
until  the  fifth  of  July. 

Now,  while  he's  gone,  we  want  to  all  get  together  and  give  him  a  surprise 
party  —  put  astonishment  all  over  his  face. 

A  lot  of  you  fellows  have  been  itching  to  show  your  appreciation  of  his 
splendid  work  in  some  practical  way.  And  you  have  demonstrated  how  you 
felt  toward  liim  by  rolling  up  record  business. 

But  now  is  yoiu"  best  chance  to  do  the  big  thing.  This  is  your  opportunity 
to  show  him  in  a  way  that  he  will  most  appreciate  that  you  are  right  with  him 
every  minute,  and  that  you  have  the  highest  personal  regard  for  him  and  the 
very  able  way  he  has  handled  the  exacting  duties  of  his  position. 

There  isn't  any  too  much  time  left,  but  there's  enough.  Plug  the  game  as 
you  have  never  plugged  it  before  and  let's  roll  up  a  bunch  of  business  for  June 
that  will  make  him  gasp  for  breath  when  he  gets  back  to  the  office. 

You  can  do  it.  There's  no  doubt  of  your  ability  to  put  this  stunt  across. 
And  it  will  be  the  biggest  thing  you've  ever  done  —  big  for  you  and  big  in 
what  it  will  mean  to  him. 

The  latter  part  of  the  week  another  special  issue  went  out. 
In  the  meantime  many  of  the  managers  had  replied  to  the 


CO-ORDINATION  301 

lettergram,  pledging  their  support.     Their  replies  were  printed 
rerhatim,  with  appropriate  comments. 

The  following  samples  of  the  replies  received  will  show  the 
reception  accorded  the  idea : 

We  secured  the  following  orders  yesterday  as  the  beginning  of  our  contribu- 
tion to  the  Surprise  Party  (orders  totaled  $1,750).  We  are  confident  that 
there  is  quite  a  bunch  of  prospects  which  the  Chicago  organization  will  turn 
into  orders  for  the  success  of  the  Party. 

Telegram  received.     Detroit  is  with  you.     Everybody  working  hard. 

We  will  certainly  do  everything  we  can  in  Pittsburgh.  We  have  a  number  of 
good  prospects  which  we  expect  to  close  and  expect  to  make  oiu*  quota  or 
better  for  June. 

The  assistant  general  sales  manager  was  busy  at  the  same 
time  with  inspiring  letters  to  the  men  in  the  field,  encouraging 
and  enthusing  them.  The  last  week  of  the  month  two  more 
special  issues  of  the  house-organ  bombarded  them,  with  more 
letters.  The  month  closed  in  a  blaze  of  glory.  What  promised 
to  be  a  disastrous  period  was  thus  turned  into  the  third  largest 
month  in  the  company's  history.  The  general  sales  manager 
came  back  to  find  a  surprise  awaiting  him  indeed,  and  a  surprise 
which  warmed  the  cockles  of  his  heart.     .     .     . 

Mr.  Thrift  in  this  series*  describes  a  number  of  other  "stunts, " 
each  of  which  is  full  of  suggestions.  Each  was  selected  to  be 
of  timely  interest  —  a  baseball  contest  for  summer,  a  Christmas 
Tree  for  December,  etc.  The  purpose  of  the  whole  series  was 
to  keep  the  selling  force  up  to  maximum  speed  by  various 
forms  of  appeal  to  their  real  interests. 

These  cases  of  specialty  selling  methods  for  disposing  of 
expensive  machines  sold  by  soliciting  salesmen  are  somewhat 
different  from  those  where  the  unit  of  sale  is  small  and  where 
a  retailer  must  intervene  between  the  salesman  and  the  con- 
sumer. This  introduces  a  new  element  requiring  co-ordination 
with  the  advertising  operations. 

The  National  Lead  Company,  makers  of  white  lead,  sell 
to  retail  dealers  through  their  own  salesmen.  Their  methods 
of  getting  unity  between  advertising  and  selling  effort  are  thus 
described  by  R.  Bigelow  Lockwood : 

*Printers  Ink,  May  30,  1912,  p.  3;  June  6,  1912,  p.  17;  June  30,  1912,  p.  10; 
June  27,  1912,  p.  36. 


302        ADVERTISING  AS  A  BUSINESS  FORCE 

.  .  .  .  *As  the  methods  of  helping  painters  and  dealers 
are  much  alike  we  shall  treat  of  them  together,  but  before  we 
go  into  details  it  is  important  for  us  to  know  something  about 
the  ways  by  which  these  middlemen  are  reached.  We  should 
also  look  into  some  of  the  difficulties  which  have  to  be  met 
and  overcome  before  the  dealer  becomes  converted  to  "Dutch 
Boy"  white  lead. 

The  National  Lead  Company  employs  between  80  and  100 
salesmen  who   cover  the  country.       These  salesmen 

F&rce^  sell  to  the  dealers  only.  When  they  come  across  a 
painter  they  simply  talk  to  him,  educating  him  to 
the  value  of  using  "Dutch  Boy"  white  lead  and  explaining 
the  various  ways  by  which  the  company  will  help  him  to 
increase  his  local  trade  and  build  up  a  reputation.  All  calls 
made  upon  painters  are  looked  upon  as  "missionary  work"; 
part  of  the  plan  to  create  the  demand  for  "Dutch  Boy"  white 
lead  for  the  ultimate  benefit  of  the  dealer,  who  buys  his  stock 
in  proportion  to  the  rapidity  with  which  he  moves  it  off  his 
shelves. 

There  is  another  way  by  which  painters  and  dealers  are 
reached.  This  is  through  the  medium  of  a  monthly  magazine 
devoted  to  the  interests  of  good  painting  and  called  The  Dutch 
Boy  Painter;  it  is  issued  by  the  advertising  department  of  the 
company.  Ninety-five  thousand  dealers  and  painters  are 
reached  by  this  publication  and  the  mailing  list  is  kept  up 
to  date.     .     .     . 

In  order  fully  to  understand  the  dealer's  position  and  gain 
a  clear  idea  of  what  often  has  to  be  done  toward  educating 
him  let  us  create  a  typical  dealer,  whom  we  will  call  Mr.  Blank. 

Mr.  Blank  does  not  have  to  be  educated  to  the  necessity 
of  carrying  white  lead  in  stock.  Every  paint  dealer  must  carry 
some  white  lead  on  his  shelves,  the  same  as  he  carries  linseed 
oil  and  colors.  A  paint  stock  without  white  lead  is  as  incom- 
plete as  a  grocery  store  without  sugar.  Mr.  Blank  knows 
all  this,  but  perhaps  like  some  of  his  brethren  he  looks  upon 
white  lead  as  more  or  less  of  a  necessary  evil  —  a  sort  of  inter- 
loper over  which  he  would  prefer  not  to  waste  much  time. 
This  attitude  springs  from  the  fact  that  he  has  become  so  infatu- 
ated with  the  idea  of  selling  specialties  at  a  certain  per  cent, 
profit  that  his  business  instincts  are  blind  to  the  profits  that 


*Adveriinng  and  Selling,  February  1911,  p.  66. 


CO-ORDINATION  303 

lie  in  such  an  old  standby  as  white  lead.  He  fails  to  see  the 
gold  in  the  ore. 

On  the  other  hand,  Mr.  Blank  may  perhaps  lean  toward 
the  other  extreme  and  feature  white  lead  as  a  "leader,"  selling 
it  at  cost  or  less  in  order  to  attract  trade  to  his  store  in  the  hope 
that  he  will  be  able  not  only  to  sell  the  "leader,"  but  various 
other  things  upon  which  he  depends  for  his  profit. 

Clearly    then,  Mr.  Blank    must    be    educated  to    a   point 

where  he  will  realize    that    white    lead   is    too   important    a 

business    builder  to  be   shoved   in  the    background. 

Educating  jjg  must  be  made  to  realize  that  a  staple  article  such 

Retailer  ^^  white  lead,  the  thing  which  is  in  reality  the  very 
backbone  of  the  paint  business,  should  not  be  allowed 
to  shift  for  itself  while  his  pet  specialties  are  being  forced  upon 
an  indifferent  buying  public.  He  must  be  taught  that  high 
percentages  of  profit,  if  figured  on  a  few  sales  only,  are  sub- 
ordinate in  importance  to  a  larger  sale  of  staple  goods  at  smaller 
profits.  Not  that  specialties  are  to  be  discarded;  but  only 
that  they  are  relegated  to  their  proper  place. 

If  Mr.  Blank  has  been  using  white  lead  as  a  "leader"  at 
a  cut  price  it  becomes  necessary  to  show  him  how  to  make 
intelligent  use  of  a  "leader"  —  how  to  harness  it  to  his  business 
and  sail  with  the  wind,  instead  of  against  it;  and  the  quickest 
way  to  go  about  that  is  to  select  as  a  "leader"  something  that 
people  know  about  and  want.  Momentum  exists  just  as  surely 
in  practical  merchandising  as  in  practical  mechanics,  and  the 
merchant  who  fails  to  avail  himself  of  the  selling  momentum 
which  "Dutch  Boy"  white  lead  has  gathered  through  years  of 
advertising  and  use  is  wasting  power.  It  is  said  that  a  ten- 
penny  nail  will  hold  the  most  powerful  locomotive  ever  built, 
provided  you  lock  the  wheel  of  the  locomotive  with  it  before 
it  gets  started;  but  let  the  locomotive  once  get  under  way  and 
it  will  laugh  at  a  ton  of  tenpenny  nails.  "Dutch  Boy"  white 
lead  may  be  compared  to  the  locomotive  coming  down  a  clear 
track  at  full  speed.  Such  a  power  doesn't  require  a  cut  price 
to  make  it  "go." 

In  connection  with  these  general  business  principles  Mr. 
Blank  is  taught  that  just  because  he  carries  "Dutch  Boy" 
white  lead  he  cannot  afford  to  remain  inactive  himself,  waiting 
for  business.  The  trade  he  sells  to  may  know  the  merits  of 
the  product,  through  the  influence  of  the  manufacturer's 
national  advertising,  but  how  are  they  to  know  that  Mr.  Blank 


304        ADVERTISING  AS  A  BUSINESS  FORCE 

carries  "Dutch  Boy"  white  lead  unless  he  brings  it  out  of  his 
cellar  or  back  room  and  puts  it  in  the  window  with  a  good-sized 
sign,  talks  about  it  and  advertises  frequently  in  the  local 
newspapers? 

Another  difficulty  that  often  stands  in  the  way  of  winning 
over  the  dealer  lies  in  the  comparative  figures  which  are  con- 
stantly being  presented  to  him  by  "knockers"  to  prove  how 
bad  a  thing  white  lead  is  for  his  business.  Dealers  are  con- 
tinually being  shown  sets  of  figures  which  appear  on  the  surface 
to  prove  that  either  no  profit  results  from  the  sale  of  white 
lead,  or  else  that  actual  money  is  being  lost  on  each  sale.  When 
such  cases  are  encountered,  it's  up  to  the  company  to  prove 
the  fallacies  contained  in  these  reports,  and  the  answer  is 
generally  along  the  following  lines: 

In  the  case  of  prepared  paint  the  profits  are  always  figured 
on  all  the  ingredients;  the  pigment,  oil,  "turps,"  colors  and  the 
drier.  This  is  so  because  these  various  ingredients  happen 
to  come  to  the  dealer  made  up  into  paint  and  are  sold  by  him, 
not  separately  as  pigment,  oil,  etc.,  but  as  paint. 

On  the  other  hand,  in  the  case  of  made-to-order  paint,  the 
profits  are  figured  on  each  ingredient  separately,  because  the 
dealer  buys  and  sells  them  separately.  Thus,  when  compari- 
sons of  profits  are  presented,  the  trap  into  which  the  dealer 
falls  is  the  comparison  of  the  profit  on  paint,  on  the  one  hand, 
with  the  profit  on  only  one  ingredient  of  paint  (white  lead) 
on  the  other.  Thus,  in  comparing  white  lead  with  mixed 
paint,  the  dealer  should  always  figure  on  white  lead  as  an 
integral  portion  of  paint,  and  must  also  take  into  consideration 
that  since  white  lead  is  useless  as  paint  without  oils,  and  various 
other  ingredients,  every  100  pounds  of  white  lead  sold  means 
the  sale  also  of  a  certain  quantity  of  linseed  oil,  turpentine, 
colors,  drier,  etc. 

To  compare  the  value  of  the  lead-and-oil  business  with  that 
of  the  mixed  paint  business  it  is  only  necessary  to  figure  what 
the  ingredients  of  a  gallon  of  white  lead  paint  cost  and  the 
profits  derived  from  their  sale.  The  result,  compared  with 
the  profits  on  a  gallon  of  mixed  paint,  shows  whether  or  not 
it  pays  to  push  white  lead. 

Figures  are  prepared  on  this  basis  by  the  advertising  depart- 
ment and  presented  to  the  dealer,  showing  that  the  profit 
to  him  on  the  ingredients  of  lead  and  oil  hand-mixed  paint 
is  equal  to  that  on  ready-prepared  paints  and  often  greater. 


CO-ORDINATION  305 

After  these,  and  similar  arguments  have  been  used  with 
success  upon  our  friend,  Mr.  Blank,  the  next  step  is  to  help 
him  move  his  stock. 

It  would  be  impossible  for  a  National  Lead  Company  sales- 
man to  carry  about  with  him  actual  duplicate  samples  of  the 
free  advertising  matter  issued  by  the  company  for  the  use 
and  convenience  of  painters  and  dealers.  These  include 
posters,  signs,  hangers,  mechanical  window  displays, 

Helping   newspaper    advertisements     bound    together    in    a 

i/al-e  ^  pamphlet,  all  ready  to  hand  to  the  printer,  electros, 

Sales  etc.  To  carry  a  "life-size"  line  would  require  several 
sample  trunks,  so  a  better  and  perfectly  efficient 
method  is  resorted  to.  Each  salesman  has  with  him  a  small 
leather-bound  loose-leaf  book  in  which  are  pictured  all  the 
various  classes  of  advertising  matter  of  which  Mr.  Blank  may 
avail  himself. 

Not  every  piece  of  free  advertising  literature  is  shown  in 
this  book,  however,  but  at  least  one  good  sample  of  each  kind 
is  listed.  Each  page  is  keyed,  and  when  a  salesman  sends 
in  an  order  for  advertising  matter  the  painter  or  dealer  gets 
all  the  matter  which  is  included  under  that  particular  form. 
Thus,  if  Mr.  Blank  is  struck  with  a  dealer's  newspaper  advertise- 
ment in  the  salesman's  sample  book  he  not  only  receives  that 
particular  one,  but  a  whole  book  of  ready-made  ads  as  well, 
out  of  which  he  tears  a  page  whenever  he  wants  his  newspaper 
copy  changed.  Electros  for  use  in  these  ads  are  supplied  free, 
and  as  the  back  cover  of  the  book  is  as  order  blank  in  post- 
card form,  self-addressed  to  the  company,  it  is  very  easy  for 
Mr.  Blank  to  send  for  whatever  electros  he  may  desire  to  use. 

This  free  advertising  service  is  also  furnished  to  painters, 
the  copy  of  course  being  written  along  different  lines  to  fit 
the  field. 

It  sometimes  happens  that  a  "Dutch  Boy"  dealer  has  a  side 
wall  on  the  outside  of  his  store  of  which  he  wishes  to  make 
some  practical  use.  Merely  painting  his  name,  together  with 
some  of  his  specialties,  lacks  life  and  he  decides  that  his  wall 
sign  should  embody  some  sort  of  a  decoration.  Here  is  where 
the  "Dutch  Boy  Painter"  often  steps  in  and  supplies  the 
missing  link.  Any  dealer  can  obtain,  upon  request,  a  suitable 
and  durable  "Dutch  Boy"  poster  which  will  fit  very  nicely 
in  his  sign  space.  The  fact  that  the  dealer  may  have  incor- 
porated the  "Dutch  Boy"  in  his  sign  purely  for  decorative 


306        ADVERTISING  AS  A  BUSINESS  FORCE 

reasons  does  not  detract  from  the  advertising  value   which 
the  National  Lead  Company  gets  out  of  the  display.     .     .     . 

Some  there  are  who  in  reading  this  article  may  ask,  "But 
what  about  the  jobber?     How  is  he  reckoned  with?" 

The  National  Lead  Company  considers  the  jobber 
Ah    ffj      ^^  ^^  little   importance  that   no  advertising  matter 

Jobber  f    ^^  ever  addressed  to  him  as  a  jobber.      He  is  treated 
exactly  the  same  as  a  dealer.     In  the  East  his  influ- 
ence scarcely  counts,  but  in  the  West  he  assumes  slightly  more 
prominence,  due  to  the  fact  that  travel  is  more  expensive  in 
western  territory. 

The  selling  force  of  the  National  Lead  Company  is  extremely 
effective.  Analyze  the  reason  and  you  will  find  that  there  is 
hearty  and  enthusiastic  co-operation  between  the  salesmen 
and  the  advertising  department. 

In  many  companies  co-operation  between  these  two  depart- 
ments is  a  dream  which  is  never  fully  realized.  There  is  very 
apt  to  be  an  earnest  endeavor  on  the  part  of  the  advertising 
department  to  bring  this  ideal  condition  about,  but  generally 
the  effort  is  all  one-sided.  Salesmen,  as  a  rule,  are  backward 
about  giving  credit  to  the  advertising  department.  They  are 
too  prone  to  subordinate  this  branch  of  the  business,  preferring 
to  stand,  or  at  least  assuming  to  stand,  entirely  upon  their 
own  resources.  While  such  an  attitude  is  not  healthy,  it  pretty 
generally  exists;  but  not  in  the  particular  case  under  present 
discussion.  Every  salesman  in  the  employ  of  the  National 
Lead  Company  is  made  to  feel  that  he  is  an  actual  part  of  the 
advertising  department,  with  a  voice  in  its  plans  and  campaigns. 

This  feeling  of  unity  was  not  created  in  a  day.  It  took 
time,  and  the  methods  which  were  originally  employed  to  create 
it  are  never  relaxed.  The  advertising  department  never  ignores 
the  salesmen.  At  the  beginning  of  every  campaign  the  general 
outlines  and  policies  are  presented  to  the  sales  force,  and  later 
the  actual  details  as  they  are  worked  out  are  laid  before  the 
salesmen  for  their  inspection  and  criticism. 

The  preliminary  outlining  of  general  policies,  at  the  begin- 
ning of  a  campaign,  is  done  by  the  advertising  manager  of  the 
company  at  branch  sales  conventions  which  are  held 

„  J.  .      when  necessary  in  the  various  sections  of  the  country 

^ Plans   represented  by  the  several  branches.     At  these  con- 
ventions all  the  plans  of  the  advertising  department 
are  presented  to  the  salesmen  in  conference,  and  it  is  shown 


CO-ORDINATION  307 

j.ist  where  and  how  the  salesman's  help  is  absolutely  essential 
in  the  carrying  out  of  the  suggested  policies. 

Later  presentation  of  details  is  made  by  means  of  a  bulletin, 
prepared  in  New  York  and  issued  conjSdentially  to  each  man. 

By  taking  the  men  on  the  road  into  the  strictest  confidence, 
a  feeling  of  loyalty  and  "oneness"  is  built  up.  The  really 
ideal  condition  exists  where  the  men  who  make  up  the  sales 
force  of  an  organization  are  as  desirous  of  working  with  the 
advertising  department  as  the  advertising  manager  is  of  working 
with  them.  Secure  this  state  of  affairs,  even  to  a  moderate 
degree,  and  the  chances  are  in  favor  of  something  doing  all 
along  the  line. 

The  H.  J.  Heinz  Company,  of  Pittsburgh,  makers  of  pickles 
and  preserves,  sell  directly  to  the  retail  grocers  so  that  their 
selling  problems  are  not  unlike  those  of  the  National  Lead 
Company.  But  the  differences  in  the  character  of  the  products 
make  the  use  of  different  methods  imperative.  Frederick 
W.  Nash,  who  was  over  seven  years  in  the  sales  and  advertising 
department  of  this  company,  gives  the  following  interesting 
description  of  some  of  the  methods  employed  in  securing  the 
proper  co-ordination  between  the  concern's  sales  and  adver- 
tising activities. 

*A    systematic    and  thorough  course  of  instruction  in  the 

art  of  displaying  the  51  varieties   in  grocery  stores  is   given 

every   Heinz    salesman    by    trained    demonstrators 

Selling  a  employed  by  the  company.     These  instructors  work 

Specialty  with  two  or  three  salesmen  at  a  time,  during  their 

attendance   at   local    sales   conventions,    until  each 

traveler  can  build  attractive  window  displays,  ingenious  counter 

pyramids,    and    artistic    shelf    departments    of   Heinz   goods, 

not  neglecting  such  fine  points  as  proper  color  schemes  in 

their  assortment.     As  each  line  of  products  is  advertised  in 

season,  he  makes  that  particular  variety  or  group  the  most 

prominent  in  his  display  work  in  the  stores,  so  that  there  may 

be  no  failure  to  bring  these  goods  to  the  consumer's  attention 

while  the  periodical  advertising  is  appearing. 

When  the  company  is  ready  for  any  special  advertising 

*Printers'  Ink,  November  23,  1911,  p.  3. 


308        ADVERTISING  AS  A  BUSINESS  FORCE 

campaign  —  and  nearly  all  of  them  are  "special"  —  advance 
proofs  are  mailed  to  the  500  members  of  the  sales  force,  usually 
twenty-five  or  more  proofs  to  each  salesman,  with  instructions 
personally  to  post  up  these  proofs  in  the  leading  stores  in 
their  territories.  This  "personally  placed"  proof  advertising 
reaches  the  merchant  and  his  clerks  with  all  its  force  and  effect, 
whereas  comparatively  few  would  read  the  periodicals  in 
which  it  appears  or  notice  it  there.  This  single  sheet  "ad," 
pasted  on  a  store  window  or  under  the  glass  of  a  showcase, 
is  also  read  by  thousands  of  consumers  aw'aiting  service  in  the 
stores.  It  attracts  the  curious,  and  many  read  it  when  posted 
in  this  way  who  would  scarcely  glance  at  it  in  turning  the  pages 
of  their  magazines.  This  extra  circulation  of  from  10,000 
to  15,000  counts  when  handled  in  the  proper  manner.  It  also 
assists  the  salesmen  in  securing  adequate  distribution  on  the 
varieties  advertised,  in  advance  of  the  publication,  and  is  a 
special  lever  to  induce  prominent  displays  of  the  advertised 
goods,  in  the  arrangement  of  which  the  salesman  puts  to  good 
use  the  expert  knowledge  gained  through  the  instruction  above 
described. 

Figuring  on  an  average  of  about  twenty  window  displays 
and  thirty  interior  showings  for  each  salesman,  it  will  be  seen 
that  when  the  Heinz  ad  on  mince  meat  appears,  just  before 
Thanksgiving,  for  instance,  there  will  be  prominent  presentation 
of  the  goods  by  something  like  25,000  stores  in  the  United 
States  when  tha  publication  reaches  the  consumer.  Adver- 
tising "sharps"  can  figure  out  for  themselves  the  dollar  value 
of  such  display  in  connection  with  periodical  advertising. 

But  the    Heinz   salesman's   job    of   co-operation  is   by   no 

means  done  when  this  part  of  the  work  is  completed.     Every 

Saturday,  except  in  midsummer  the  Heinz  represent- 

Salesmen  ^tive  spends  his  time  in  one  of  his  most  influential 

Educators  stores,  and,  equipped  with  fine  china  and  silver,  he 

serves  in  a    clean,    high-class,   appetizing    manner, 

attractive  samples  of  "the  57"  to  callers  at  the  store,  at  the 

same  time  explaining  about  the  Heinz  Model  Clean  Kitchens, 

open  to  visitors  all  the  time;  tells  about  the  fine  materials  used 

in  all  Heinz  goods,  and  why  no  preservatives  of  artificial  nature 

are  required  in  the  Heinz  establishment,  etc.,  etc. 

Consider  that  at  least  350  of  these  trained  salesmen  put  in 
an  average  of  eight  hours  each  day  for  about  thirty  Saturdays 
per  annum  talking  Heinz   advertising   direct  to  women  most 


CO-ORDINATION  309 

interested  —  reaching,  say,  a  total  of  10,000  homes  per  annum 
in  this  personal  way,  and  you  can  get  a  pretty  fair  idea  of  the 
value  of  such  work,  done  by  men  of  above  average  intelligence 
and  appearance.  Remember,  also,  that  this  work  is  done  on 
Saturdays,  which  are  off  days  for  effectively  soliciting  in  the 
city  trade,  anyway.  Not  content  with  reaching  only  the 
customers  who  call  at  the  stores,  however,  a  number  of  attrac- 
tive solicitors'  cases  furnished  by  H.  J.  Heinz  Company,  each 
containing  three  or  four  packages,  assorted,  of  the  particular 
goods  the  grocer  or  the  Heinz  Company  desires  to  push,  are 
placed  in  the  hands  of  the  grocers'  clerks  by  the  Heinz  sales- 
man, with  instructions  how  to  use  them  in  making  the  rounds 
of  the  house  for  grocery  orders.  It  is  a  common  occurrence 
for  a  grocer's  own  solicitor,  when  coached  by  the  Heinz  repre- 
sentative, to  sell  to  homes  on  the  outside  more  Heinz  goods 
and  create  more  new  business  for  "the  57"  during  a  "Saturday 
Demonstration  "  than  is  done  in  the  store.  This  is  what  Mr. 
Heinz  calls  "a  salesman  multiplying  himself  while  he  is  on  the 
job." 

This  is  one  method  of  co-operating  in  reaching  the  con- 
sumer when  the  merchant  is  agreeable  and  carries  the  goods, 
but  if  desired  or  necessary  local  distribution  is  not 

Going  forthcoming  after  the  salesman  has  done  his  best  to 
Consumers  S^t  the  goods  in  by  working  on  the  grocer,  the  up-to- 
date  Heinz  traveler  now  goes  direct  to  the  consumer 
personally.  Perhaps  a  concrete  example  will  best  illustrate 
the  method  used  in  this  work. 

Out  in  Wisconsin  there  was  a  thriving  town  of  about  10,000, 
where  the  Heinz  representative  could  get  no  vinegar  customers 
among  the  grocers.  All  bought  from  farmers,  from  friends, 
or  would  not  pay  the  higher  price  for  the  Heinz  product,  stating 
that  their  customers  were  satisfied  with  the  vinegars  sold  at 
lower  prices  and  would  not  pay  more.  Finding  himself  appar- 
ently up  against  a  stone  wall  with  the  dealers,  the  salesman 
put  in  a  solid  week  in  this  town,  visiting  the  leading  homes. 
He  obtained  names  of  next-door  neighbors  from  door  to  door,  and 
often  made  such  a  good  impression  as  to  get  cards  and  letters 
of  introduction  to  tell  his  story  to  friends  of  the  ladies  interested. 
He  took  no  orders,  but  introduced  himself  as  a  special  repre- 
sentative of  H.  J.  Heinz  Company,  in  connection  with  vinegar, 
and  merely  wished  to  explain  to  the  lady  of  the  house  some 
things    about   vinegar   which   interested   most   housekeepers. 


310        ADVERTISING  AS  A  BUSINESS  FORCE 

He  Induced  the  women  to  get  out  samples  of  the  vinegars  they 
were  using  and  without  "knocking,"  easily  demonstrated  great 
superiority  for  his  samples,  working  in  an  interesting  story 
the  vinegar  manufacture  practised  by  Heinz  as  compared  with 
the  crude  and  imperfect  methods  of  farmers.  When  asked 
where  Heinz  vinegars  were  for  sale  in  the  town,  he  stated 
that  he  regretted  to  advise  there  was  no  merchant  who  carried 
it  in  stock  here,  and  explained  the  reason  as  given  him  by  the 
merchants  —  that  the  people  would  not  pay  the  price  necessary 
to  ask  for  really  good  vinegar;  they  were  satisfied  with  the 
(poor)  quality  being  furnished  them. 

He  suggested  that  if  the  madam  desired  her  grocer  to  supply 
her  with  Heinz  vinegars,  or  felt  differently  about  being  satisfied 
with  the  farmer's  vinegar,  she  should  enlighten  her  grocer  on 
the  subject.  After  about  fifty  of  the  most  influential  women 
of  the  town  had  held  indignant  conversations  over  the  telephone 
with  their  grocers,  the  distribution  proposition  on  Heinz 
vinegar  in  that  town  was  materially  different.  By  diplomatic 
handling  the  salesmen  kept  from  antagonizing  the  merchants, 
who  generally  appreciated  that  the  "joke  was  on  them,"  but 
the  chief  feature  of  this  experience  was  the  permanent  vinegar 
business  built  up  in  that  town  as  the  result  of  the  work.  From 
a  condition  of  no  dealer  handling  it,  all  soon  sold  it,  and  the 
women  who  heard  the  "story  of  the  Heinz  Vinegar,"  wanted 
other  Heinz  varieties,  so  that  general  business  was  helped  on 
the  line.  This  particular  salesman  was  working  on  straight 
commission,  and  did  this  work  on  his  own  account  and  time, 
but  the  results  secured  made  it  a  profitable  week  in  dollars 
and  cents  to  him  and  demonstrated  to  the  company  the  value 
of  such  special  work  by  salaried  men,  wherever  needed  to  meet 
special  conditions.  H.  J.  Heinz  Company  does  not  underrate 
the  value  of  *^ personal  advertising''^  by  all  their  employees. 

During  the  "Benzoate"  campaign  the  matter  was  carefully 
explained  to  all  connected  with  the  company,  with  the  sug- 
gestion that  by  refusing  to  use  any  food  prepared  with  artificial 
preservatives,  the  general  cause  of  food  purity,  and  also  of 
their  own  business,  would  be  advanced.  There  is  little  doubt 
that  the  influence  of  500  Heinz  traveling  men  in  various  depart- 
ments of  the  business  was  felt  by  the  recalcitrant  hotel  keepers, 
who  still  served  benzoate  ketchup  —  through  numerous  "kicks" 
about  "doped"  food.  For  a  while  the  whole  Heinz  sales  force 
talked  anti  "Benzoate"  wherever  opportunity  occurred;  they 


CO-ORDINATION  311 

educated  their  wives  and  friends  to  do  likewise,  and  they 
influenced  many  strangers  to  join  them  in  the  campaign  by 
their  pubUc  talk  and  acts  on  the  subject.  This  is  what  might 
be  called  "auxiliary  advertising"  by  a  sales  force,  and  that 
it  was  proved  very  effective  in  combination  with  printers'  ink 
kind  can  best  be  testified  to  by  some  of  those  interested  on 
the  other  side  of  the  benzoate  controversy. 

In  none  of  the  cases  thus  far  cited  does  the  concern  sell 
through  the  "regular"  selling  system,  including  both  the 
jobber  and  retailer.  But  there  are  many  houses  putting  out 
their  goods  through  the  "regular"  system  who  are  giving 
attention  to  these  problems. 

Charles  C.  Casey  takes  up  in  the  following  discussion  some 
of  the  concrete  problems  which  present  themselves  to  a  company 
selling  through  the  regular  distribution  system  in  its  efforts 
to  co-ordinate  its  selling  and  advertising  activities : 

*Ever  hear  of  an  advertising  department  which  was  backed 
up  in  an  ideal  manner  by  the  balance  of  the  organization? 

Making        Some    advertising    departments    are  not.    One    of 

Use  of    them  is  located  in  a  New    England  city  —  in  the 
Consumers  general  offices  of  a  certain  well-known  advertiser. 
Inquiries       This    particular    advertising   department   has   the 
nice  little  task  of  handling  several  hundred  consumer  inquiries 
a  month  through  dealers  everywhere. 

Inquiries  are  obtained  on  a  basis  of  service  to  the  customer, 
and  the  advertising  department  works  hard  enough  in  its  effort 
to  see  that  the  customer  gets  service,  but 

And  there's  the  rub.  The  advertising  department  has 
cajoled  and  threatened,  and  coaxed  and  "cussed"  (in  dignified 
English),  but  the  manager  knows  that  the  customer  is  not 
getting  a  tenth  of  the  service  it  is  the  policy  of  the  house  to  give. 

The  dealers  just  won't  see  the  inquiries  as  this  manager  sees 
them.  They  won't  handle  them  as  they  should  be  handled. 
He  can't  make  them  nor  persuade  them  to  follow  up  his  inquiries 
—  at  least  not  by  his  methods. 

Another  advertising  manager  (and  he  isn't  the  only  one) 
has  the  same  diflBculty  in  getting  salesmen  to  follow  up  inquiries. 

^Printers"  Ink,  May  16,  1912,  p.  28. 


312        ADVERTISING  AS  A  BUSINESS  FORCE 

Several  hundred  inquiries  were  sent  out  by  the  advertiser 
within  a  month,  practically  every  one  of  which  looked  good 
for  a  sale. 

But  the  sales  didn't  result.  The  advertising  fell  flat,  so 
far  as  sales  were  concerned. 

The  advertising  manager  was  not  able  to  understand  why. 
He  puzzled  over  it  for  some  time,  in  the  meantime  running 
other  advertisements  and  sending  out  more  inquiries. 

Finally  he  began  to  trace  the  inquiries  to  see  what  became 
of  them  after  they  were  sent  to  the  selling  force.  He  soon 
found  that  the  inquiries  were  being  "followed  up"  by  the  sales 
force  in  a  half-hearted  way.  Many  of  them  were  thrown  away 
without  even  being  followed  up. 

Steps  were  immediately  taken  to  compel  the  salesmen  to 
follow  up  the  inquiries  promptly  and  to  try  to  close  up  sales. 

The  sales  manager  and  the  general  manager  were  both 
shocked  at  the  ad  man's  report  and  both  took  up  the  problem. 
They  promptly  and  authoritatively  instructed  each  individual 
salesman  to  follow  up  every  inquiry  to  the  last  source  of  infor- 
mation. 

A  good  many  salesmen  came  back  with  hot,  resentful  letters, 
citing  instances  where  inquiries  had  been  worthless,  and  declar- 
ing they  did  not  care  to  waste  their  time  with  that  class  of 
inquiries. 

That  put  the  matter  on  a  different  basis.  The  value  of  the 
inquiries  was  a  hard  question  to  determine  —  "maybe  the  ad 
man  didn't  know." 

Things  went  on  in  a  bad  way  for  several  months.  Then, 
there  being  little  actual  business  resulting  from  the  advertising, 
the  appropriation  was  not  renewed  and  the  advertising  was 
stopped.     .     .     . 

If  the  average  advertising  man  could  instil  into  his  board 
of  directors,  into  his  general  manager,  into  the  sales  manager, 
and  into  all  of  the  members  of  the  sales  force  the  same  enthusi- 
asm which  he  has,  he  could  do  twice  as  much  productive  adver- 
tising with  half  the  appropriation. 

That  is  putting  it  strong,  but  lack  of  co-operation  is  one  of 
the  most  serious  handicaps  which  the  advertising  man  has 
to  overcome. 

Most  advertising  managers  need  an  advertising  manager; 
somebody  to  advertise  them  and  the  advertising  department 
to  their  own  organization. 


CO-ORDINATION  313 

Nearly  all  advertising  men  keep  so  busy  trying  to  sell  their 
company's  product  to  consumers  that  they  lose  sight  of  the 
necessity  of  selling  advertising  to  their  own  people. 

And  then  lots  of  advertising  men  are  pretty  busy  keeping 
their  boards  of  directors  "sold"  on  advertising  and  their  bosses 
"sold"  on  themselves  as  the  man  to  handle  the  appropriation. 

In  some  organizations  the  advertising  man  is  about  the  only 
one  who  knows,  or  cares,  anything  about  the  advertising.  And, 
if  he  attempts  to  keep  records  to  prove  the  "results,"  most  of 
those  on  whom  he  tries  to  use  his  figures  openly  or  secretly 
charge  unfairness  in  "estimating"  the  value  of  his  kind  of 
"results." 

If  they  all  knew  as  much  about  advertising  as  the  advertising 
man  ought  to  know,  there  would  be  no  difiiculty  in  getting 
co-operation.  But  the  average  organization  is  satisfied  with 
thinking  it  knows. 

Everybody  in  the  average  organization,  from  the  advertising 
man's  own  stenographer  to  the  president  himself,  is  likely 
to  entertain  a  secret  notion  that  they  could  write  advertisements 
a  little  better  than  most  of  those  printed. 

Even  the  office  boys  are  likely  to  entertain  each  other  with 
jokes  about  the  "awful  illustrations"  used  in  some  of  the  ads. 

The  advertising  man  who  is  wise  won't  miss  any  opportunity 
to  advertise  advertising,  particularly  his  kind  of  advertising, 
to  everybody  in  his  own  organization. 

He  should  never  let  a  piece  of  mail  go  out  of  his  office 

„„,..    „  for     anybody     in     the     organization     until     it     is 

^the^     polished    and    labeled    "18k    gold."     Every    move 

Advertising s\io\x\d  be  a  part  of  an  organized  campaign  to  "sell" 

to  the  the  department  and  its  work,  and  keep  it  sold,  to 
Sales  Force  everybody  in  the  organization,  from  the  janitor  up. 

The  department  should  never  send  and  inquiry  out  into  the 
field  without  trying  to  "sell"  it,  either  as  a  sales  tip  or  as 
something  otherwise  valuable,  to  the  man  who  gets  it. 

It  costs  money  to  obtain  inquiries.  The  advertiser  should 
certainly  be  willing  to  spend  something  to  follow  them  up. 

If  you  don't  think  any  more  of  your  advertising  inquiries 
than  to  "dump"  them  into  the  busy  salesman's  desk  without 
explanations,  don't  blame  him  if  he  dumps  them  into  the 
waste-basket. 

Unless  you  put  a  value  on  your  advertising  department, 
it  will  be  accepted  as  valueless. 


314        ADVERTISING  AS  A  BUSINESS  FORCE 

The  most  the  organization  can  be  expected  to  do  is  to  accept 
the  department  at  the  value  it  puts  upon  itself  and  upon  its 
fruits. 

Not  only  is  the  problem  of  co-ordination  between  advertising 
and  selling  a  matter  of  securing  the  enthusiasm  of  the  organized 
selling  force,  but  it  also  extends  clear  down  to  interesting  the 
various  factors  in  the  distribution  system,  even  including 
the  retailer's  clerk.  Clayton  A.  Eddy,  advertising  manager 
of  the  Detroit  Stove  Works,  of  Detroit,  Mich.,  describes  in  the 
following  terms  some  of  the  methods  which  have  been  em- 
ployed by  various  manufacturers  in  co-ordinating  the  work 
of  their  advertising  and  their  distribution  system : 

*Too  many  manufacturers,  it  seems  to  me,  lack  the  quality 
of  good  sportsmanship  toward  their  national  advertising, 
whether  in  the  magazine  or  the  newspaper.  They  do  not  give 
the  supplementary  service  sufficient  force  to  extend  to  it  the 
actual  sales.  These  are  the  very  people  who  frequently  com- 
plain that  "national  advertising  isn't  paying  me  as  it  should." 

National  advertising  is  only  the  first  step  toward  the  sale. 
The  manufacturer  who  wants  to  cash  in  to  the  utmost  upon 
his  campaign  must  explore  the  resources  of  his  common  sense 
and  ingenuity  to  bring  the  diffused  force  of  it  to  bear  in  those 
places  where  potential  sales  are  apt  to  clog. 

A  salt  manufacturer  who  had  advertised  in  a  national  way 
for  many  years  found  his  advertising  was  not  bringing  the 
results  it  should.  His  product  was  sold  through  the  jobber 
to  the  retailer.  After  careful  investigation  among  the  channels 
of  distribution  for  cause  and  effect  he  decided  the  jobbers' 
salesmen  were  lukewarm  over  the  proposition.  The  fact  was, 
this  manufacturer  had  taken  for  granted  that  the  jobbers' 
salesmen  knew  as  much  about  his  proposition  as  he  did  himself. 

He  did  not  realize  that  the  special  processes  employed  in 
mining  the  salt  and  preparing  it  for  market  were  so  intricate 
that  they  required  much  thought  in  order  fully  to  understand 
them.  IJnless  the  jobbers'  salesmen  and  the  retailers  did 
understand  about  the  special  processes  they  would  not  under- 


*Printers'  InJc,  December  7,  1911,  p.  14. 


CO-ORDINATION  315 

stand  or  be  able  to  explain  the  reason  for  the  superiority  of 
the  salt  or  its  higher  price. 

After  reasoning  this  out  the  manufacturer  decided  a  campaign 
of  education  was  needed.  He  wrote  every  jobber  with  whom  he 
was  doing  business  and  secured  the  names  and  addresses  of 
every  salesman  on  his  force.  He  then  started  a  direct  cam- 
paign to  these  men,  going  into  details  relative  to  the  manufac- 
ture and  purifying  methods  used  before  the  salt  was  ready 
for  marketing  and  giving  reasons  which  the  salesmen  could 
explain  in  talking  to  customers. 

The  first  piece  on  the  list  was  an  attractive  folder  show- 
„  „  ,  ing  views  of  the  plant,  the  special  machinery  used 
ManufM-  ^"^  ^^^^  preparation  of  the  salt  and  the  advantages 
turer  which  this  manufacturer  had  over  other  salt  manufac- 
Stirred  Up  turers.  The  next  folder  showed  how  the  salt  was 
His  Sales  j^rought  from  the  wells  into  special  storage  tanks, 
how  the  brine  was  drawn  off  to  a  series  of  heaters, 
how  the  impurities  were  taken  out  and  only  the  finest  digest- 
ible salt  remained. 

By  a  series  of  these  folders  he  carried  the  salesmen  along 
step  by  step  until  at  the  finish  this  special  brand  of  salt  was 
as  well  known  to  them  as  any  line  of  goods  they  sold.  Further 
to  secure  their  good  will  and  co-operation  a  series  of  folders, 
entitled,  "Men  Who  Do  Things,"  was  mailed  to  the  list. 
These  folders  were  interesting  because  they  described  the  lives 
and  hobbies  of  prominent  business  men,  told  about  them  in 
an  entertaining  way,  and  the  only  reference  to  the  manufac- 
turer's proposition  was  a  few  lines  at  the  bottom. 

This  campaign  was  so  interesting  to  the  salesmen  that  a 
large  number  of  them  carried  various  pieces  on  their  trips 
and  showed  them  to  the  merchants  they  called  upon.  That 
it  was  a  success  was  proved  when  the  orders  on  this  special 
brand  of  salt  increased  to  a  great  extent  the  following  year, 
and  salesmen  now  consider  this  salt  the  best  known  brand 
of  its  kind  on  the  market. 

A  maker  of  refrigerators  made  the  most  of  his  advertising 

campaign   during   the   spring  months  by  also  using 

TheMetkods  space    in   a   high-grade    supplement  which  was    in- 

Ref        to   eluded  with  the  leading  newspapers  in  several  large 

Maker     cities.      This  manufacturer  arranged   for   good-sized 

space   in  this  supplement,  had  newspaper  electros 

made  of  the  advertisements,  just  as  they  would  appear  in  the 


316        ADVERTISING  AS  A  BUSINESS  FORCE 

supplement  and  then  arranged  with  his  salesmen  in  the  cities 
in  which  the  advertisements  were  to  appear  to  call  upon  the 
local  dealer  and  secure  his  co-operation  by  showing  him  where 
he  could  advantageously  use  space  enough  in  that  particular 
edition  of  the  Sunday  newspaper  to  run  the  ready-made  ads. 
He  showed  dealers  where  he  was  advertising  direct  to  the 
people  in  their  communities.  Co-operating  with  the  national 
advertising  and  using  space  over  his  own  name  in  the  local 
Sunday  paper  just  at  the  time  the  manufacturer's  advertising 
appeared  in  the  supplement,  would  give  the  dealer  a  certain 
amount  of  prestige  and  sales  which  he  could  not  secure  in  any 
other  manner.  A  large  number  of  dealers  in  the  various  cities 
took  advantage  of  this  proposition  and  increased  their  sales 
very  materially. 

A  manufacturer  of  kitchen  cabinets  secured  the  co-operation 
of  dealers  by  suggesting  a  plan  to  boom  trade  during  a  sup- 
posedly dull  season.  One  dealer  only  in  a  city  or  town 
^j,  has  the  selling  agency  for  this  line.  These  dealers 
/^g^  are  for  the  most  part  instalment  houses  selling  on  time 
payments.  The  manufacturer  suggested  to  each 
dealer  on  his  books  that  he  form  a  Kitchen  Cabinet  Club.  The 
plan  was  to  form  a  club  of,  say,  fifty,  giving  to  each  member 
special  terms  by  which  they  are  able  to  buy  a  kitchen  cabinet 
at  an  attractive  price.  One  dealer  using  the  plan  advertised, 
"  By  joining  the  club  you  have  a  Blank  kitchen  cabinet  delivered 
to  your  home  at  once  on  payment  of  only  $1  at  time  of 
joining  and  $1  each  week  thereafter  for  twenty-four  weeks." 

The  regular  price  of  this  kitchen  cabinet  as  fixed  by  the 
manufacturer  is  $25  cash  or  $27.50  on  easy  payments.  The 
cash  price  is  never  any  less,  and  it  is  only  through  these  semi- 
annual club  sales  that  they  can  be  bought  for  $25  on  easy 
payments.  In  other  words,  if  you  join  the  club  you  get  your 
cabinet  at  the  lowest  cash  price  and  pay  for  it  in  dues  of  only 
$1  a  week  —  a  clear  saving  to  you  of  $2.50.  The  advantage 
of  this  plan  to  the  dealer  is  that  it  does  not  mean  selling  it  at 
a  cut  price,  but  simply  offering  a  special  proposition  by  which 
a  certain  number  of  buyers  can  obtain  a  cabinet  and  pay  weekly 
on  the  same  terms  as  ordinarily  made  to  cash  purchasers. 
A  large  number  of  dealers  found  this  an  excellent  method  of 
booming  sales  at  a  season  when  they  would  otherwise  be  very 
slow. 

Many  manufacturers  find  their  adveij^ising  does  uot  get  the 


CO-ORDINATION  317 

kind  of  co-operation  from  their  own  sales  force  necessary  to 
insure  the  greatest  success.  Many  salesmen  are  willing  to 
talk  about  the  advertising  their  firms  are  doing  and  use  the 
plans  to  help  them  sell  goods  when  possible,  but  they  are  not 
well  enough  informed  regarding  the  advertising  to  use  the 
proposition  as  effectively  as  it  might  be  used. 

One  manufacturer  spending  a  considerable  amount  in  na- 

Askinq  tional  advertising  prepared  at  frequent  intervals 
Questions  a  list  of  questions  relative  to  the  advertising,  and 
About  the  makes  it  part  of  the  duty  of  each  salesman  to  send 
Advertising  -^^  written  answers  to  the  questions  to  the  adver- 
tising department.     Questions  such  as  the  following  are  asked : 

"When  is  our  magazine  advertising  to  appear.?"  "How 
many  months  will  it  run?"  "What  are  the  mediums  used.?" 
"What  are  the  advertising  helps  we  furnish  the  dealer  selling 
our  line.?"  "What  can  the  dealer  expect  from  us  in  the  way 
of  co-operation,  etc. 

By  this  method  the  manufacturer  knows  absolutely  that 
his  salesmen  are  not  only  fully  informed  regarding  a  campaign 
upon  which  sales  depends,  but  their  active  interest  is  at  all 
times  assured. 

A  manufacturer  in  sending  out  advertising  matter  to  his 
salesmen  found  after  watching  the  force  closely  for  a  time 
that  many  of  the  salesmen  were  not  posted  on  the  advertising. 
He  found  that  while  advertising  matter  was  sent  to  each  and 
every  salesman,  some  did  not  give  it  the  attention  it  deserved. 
When  they  came  to  headquarters  they  would  claim  that  in 
many  instances  certain  forms  of  advertising  matter  had  never 
been  sent  them  and  therefore  they  did  not  know  the  house  was 
furnishing  it.  To  overcome  this  and  to  be  absolutely  sure  that 
each  salesman  received  all  the  advertising  matter  and  samples 
furnished  the  trade,  a  return  post-card  was  included  with  every 
piece  of  advertising  matter  sent  to  the  salesmen.  They  were 
requested  to  sign  this  card  and  return  it  to  the  home  office. 
By  that  method  a  record  was  kept  of  shipments  to  every  sales- 
man and  their  statements  of  "never  received  it"  are  met  with 
the  card  they  signed  as  a  receipt. 

One  manufacturer  realizing  the  importance  of  the  retailer's 
co-operation  sent  out  a  printed  form  to  every  dealer  on  his 
books  asking  questions  pertinent  to  his  line  and  the  needs  of 
the  dealer.  Questions  as  to  whether  the  dealer  received  many 
inquiries  from  a  particular  advertising  campaign;  whether  sales 


318        ADVERTISING  AS  A  BUSINESS  FORCE 

were  made  easier;  whether  the  dealer  could  suggest  any  plan 
which  the  manufacturer  was  not  then  using  for  increasing 
the  selling  efficiency  were  asked.  They  were  also  requested 
to  send  in  any  special  plans  or  suggestions  which  it  might  occur 
to  them  would  be  of  assistance  in  pushing  the  line.  This 
manufacturer  not  only  received  a  large  number  of  these  question 
sheets  filled  out  and  signed,  many  of  which  contained  excellent 
suggestions,  but  the  plan  also  had  value  in  getting  the  interest 
of  dealers  and  making  them  feel  their  suggestions  and  co-oper- 
ation in  the  selling  of  the  line  were  desired. 

In    a    great    many    instances    house-organs    have     proved 

The  Use  most  valuable  in  backing  up  the  national  adver- 
oj  House-  tising    campaigns.      One    manufacturer    publishing 

organs  a  house-organ  had  on  his  mailing  list  over  16,000 
retail  merchants.  Hardly  an  issue  of  the  paper  went  out  that 
it  did  not  contain  some  reference  to  the  advertising  campaign. 
This  firm  did  not  take  for  granted  that  because  they  were  doing 
a  considerable  amount  of  advertising  all  their  customers  knew 
about  it.  The  house-organ  edited  along  the  right  lines  can  be 
made  a  great  ally  for  the  advertising  department.  It  can 
educate  retailers  to  the  importance  of  selling  advertised  goods 
and  show  them  why  it  will  prove  most  profitable  for  them. 
It  can  offer  suggestions  for  local  advertising  and  above  all 
instil  enthusiasm  for  the  line  and  confidence  in  the  manufac- 
turer and  the  goods  he  advertises. 

The  plan  of  selecting  special  weeks  and  devoting  them  to 
the  exclusive  advertising  of  a  certain  brand  of  paints  or  shoes 
has  been  successfully  worked  out  by  several  manufacturers. 
One  large  paint  manufacturer  arranged  for  space  in  a  number 
of  prominent  magazines  during  certain  weeks  in  the  spring. 
He  desired  this  advertising  to  do  full  duty  for  both  the  factory 
and  the  dealers.  He  realized  that  concentrated  effort  on  the 
part  of  both  was  necessary  to  secure  the  greatest  value.  Every 
dealer  selling  the  line  was  advised  that  a  certain  week,  the  dates 
of  which  were  given,  would  be  known  as  "Blank  Paint  Week." 
During  that  week  their  advertising  would  appear  in  full  force 
in  a  large  list  of  magazines.  Dealers  were  offered  special  win- 
dow trims  for  paint  week  displays,  paint  car  and  window  cards, 
special  electros  for  newspaper  advertising,  etc.  This  adver- 
tising, used  during  the  entire  week. 

The  response  to  this  offer  was  surprising  to  the  manufacturer. 
From  all  over  the  country  dealers  wrote  commending  the  plan 


CO-ORDINATION  319 

and  offering  to  co-operate  to  make  Blank  paint  week  a  success. 
The  result  was  that  concentrated  efforts  on  the  part  of  dealer 
and  manufacturer  made  this  extensive  magazine  advertising 
the  most  profitable  of  any  advertising  they  had  ever  used. 

A  well-known  shoe  manufacturer  used  a  similar  plan  with 
excellent  results,  choosing  a  week  during  the  fall  and  reminding 
the  dealers  for  weeks  ahead  regarding  the  Blank  shoe  week. 

CO-ORDINATION   IN   ADMINISTRATION 

As  has  been  seen  from  some  of  the  cases  cited,  the  problem 
of  properly  adjusting  the  administrative  organization  of  the 
advertising  and  selling  departments  is  an  extremely  difficult 
one,  but  each  of  these  cases  shows  that  it  is  not  at  all  impossible 
to  solve  this  problem  and  to  make  the  two  supplement  each 
other  satisfactorily  in  actual  operation. 

F.  Manning,  the  general  sales  and  advertising  manager  of 
the  Grape  Products  Company,  of  Northeast,  Pa.,  (makers 
of  Walker's  Grape  Juice)  contends  that  the  sales  and 
advertising  managerships  should  be  one.  Mr.  Manning  backs 
up  his  contention  with  the  record  of  his  own  experience  in 
exploiting  Walker's  Grape  Juice,  and,  as  this  product  is  sold 
through  the  "regular"  channels  of  trade,  his  case  serves  to 
illustrate  the  fact  that  the  principles  developed  in  some  of 
the  other  cases  of  direct  sale  may  also  be  applied  under  indirect 
selling  conditions. 

*" Selling"  and  "Advertising,"  while  seemingly  considered 
as  two  separate  branches  of  business  endeavor  and  expense, 
are,  in  fact,  inseparable  units  of  the  same  thing,  "Salesman- 
ship." 

And  while  the  actual  taking  of  orders  may  be  directed  by 
one  head,  and  the  advertising  of  the  article  covered  by  these 
orders  may  be  directed  by  another,  to  good  effect,  the  fact 
that  these  two  great  selling  forces,  directed  at  the  same  objec- 
tive, and  being  each  dependent  upon  the  other,  so  similar  in 
character  and  results,   should  certainly  indicate  consolidated 

*Printers"  Ink,  September  29,  1910,  p.  3. 


320        ADVERTISING  AS  A  BUSINESS  FORCE 

management,  just  as  do  the  various  branches  of  manufacture. 
One  rarely  encounters  a  factory  in  which  all  the  various  divi- 
sions of  production  are  not  directed  by  a  single  head  —  under 
supervision,  perhaps,  but  with  one  centre  of  management  and 
responsibility.  This  being  the  case  in  manufacture,  why  should 
the  combined  selling  effort  be  handled  as  two  separate  branches 
of  the  business  organization? 

Advertising  is  as  dependent  upon  the  selling  for  results  as 
the  salesman  is  dependent  upon  advertising  for  consumer 
demand  with  which  to  interest  the  retailer  and  secure  prestige 
with  the  jobber.  No  dealer,  whether  retailer  or  wholesaler, 
buys  an  article  simply  upon  its  merits  —  he  buys  upon  sala- 
bility  first,  price  and  profit  next,  and  then  he  may  be  interested 
in  quality. 

But  a  ready  sale,  a  steady  consumer  demand,  is  always  the 
first  thing  he  considers  in  the  purchase  of  goods  for  sale. 

This  premise  granted,  why  should  not  the  same  head  direct 
both  the  elements  needed  to  secure  signed  orders  —  the  ulti- 
mate result? 

In  introductory  work,  as  well  as  in  subsequent  development 
of  a  market,  it  is  of  vital  importance  that  salability,  prompt 
and  certain,  of  the  article  be  impressed  upon  each  member  of 
the  trade  for  which  the  article  is  intended  —  that  each  dealer 
be  convinced  that  the  goods  will  sell  —  and  the  best  proof  of 
this,  nowadays,  is  to  show  the  dealer  just  what  kind  of  adver- 
tising is  to  be  done,  how  much,  when,  and  where. 

The  dealer  should  be  taken  into  the  salesman's  confidence, 
and  the  plan,  with  reasons  for  its  employment,  explained  until 
the  buyer  is  in  position  to  purchase  the  goods  upon  his  own 
judgment  as  to  the  demand  to  be  created  by  the  advertising 
which  he  has  seen,  knows,  and  now  understands. 

The  average  dealer  will  be  found  to  have  a  peculiar  concep- 
tion of  advertising,  which,  in  so  far  as  the  trade  is  concerned, 
has  been  generalized  so  much  by  large  advertisers, 
Advertidng  g^g  ^gjj  ^^  ^y  g^  many  small  propositions  with  "flash" 
Retailer  ^  campaigns  (designed  to  shoiv  rather  than  to  create 
lasting  results),  that  the  average  buyer  regards  a 
new  article  with  a  certain  conservatism  which  borders  upon 
suspicion. 

He  says:  "Produce  this  demand  first,  and  then  I  will  stock 
your  line  —  but  in  advance,  well,  never  again."  Hard  experi- 
ence has  taught  him  to  ask  for  demand  ^r^^. 


CO-ORDINATION  321 

This  attitude  hampers  distribution,  which  in  turn  lessens 
sale  results,  and  of  course  the  advertising  ratio  of  expense  is 
increased. 

In  order  to  lessen  this  conservatism  on  part  of  the  buyer, 
it  is  only  necessary  for  him  to  understand  your  plan  of  campaign 
as  you  do,  before  he  believes  in  it  as  you  do,  and  is  willing  to 
risk  his  part  of  the  investment  in  an  effort  to  secure  his  part 
of  the  profits  accruing  from  the  advertising  —  just  as  you  do 
in  putting  it  out. 

The  "printed  word"  is  all  well  enough,  and  serves  its  purpose 
in  placing  an  advertised  product  before  the  trade  —  but  by  far 
the  most  potent  possibility  in  securing  trade  enthusiasm  (next 
to  actual  demand  itself)  is  the  confidence  inspired  by  the  sales- 
man himself  in  his  daily  contact  with  the  trade. 

Inform  your  salesman,  as  you  yourself  are  informed,  about 
your  plan,  its  aim,  purpose,  and  raison  d'etre  —  place  him  in 
position  to  reason  out,  for  himself  and  his  (your)  customer, 
why  you  are  doing  this  thing  or  that  —  and  its  relation  to  the 
future  sale  it  is  to  produce  for  his  customer,  the  dealer,  and  his 
own  sales  record. 

This  done,  the  salesman  does  not,  of  necessity,  "talk  from 
the  book"  —  he  thinks  and  explains,  with  all  the  force  of  his 
own  language,  thought,  and  conviction,  just  what  his  house 
is  doing  and  why  his  proposition  is  a  safe  one  for  the  buyer. 

For  this  result  to  be  accomplished  to  best  effect,  it  must  be 
simultaneous  with  the  trade  journal  campaign  with  the  circular 
work,  and,  if  possible,  with  the  preliminary  steps  of  the  campaign 
itself. 

This  necessitates  a  close  interlocking  of  the  sales  and 
advertising   details  —  calls    for   team   work   of  a   high    order 

Closer  —  ^^^  ^^  success  of  its  execution  determines 
Contact  in  the  exact  generalship  exercised  in  the  carrying  out 
Adminis-   of  the   composite  "sales"   and  "advertising"  cam- 

tration  paign.  And  generalship  means  profit,  ejfficiency, 
distribution,  and  lasting  results. 

Because  of  the  importance  of  the  trade  relation  and  its  peculiar 
significance  to  the  campaign  itself,  the  man  to  "general" 
this  campaign  is,  logically,  the  judge  of  merchandise,  the 
seller,  the  trained  commercial  advocate  —  the  source  of  selling 
enthusiasm,  the  man-who-foots-the-bill  of  final  results  —  the 
sales  manager. 

But  simply  because  this  sales  manager  happens  to  be  a 


322        ADVERTISING  AS  A  BUSINESS  FORCE 

successful  salesman,  or  even  a  successful  manager  of  salesmen, 
does  not  necessarily  entitle  him  to  the  position  of  sales  and 
advertising  manager  in  charge  of  this  campaign. 

If  he  is  to  direct  the  advertising  he  must  also  be  schooled 
in  that  craft  as  well;  his  knowledge  of  selling,  of  the  trade, 
of  competition,  of  territory,  etc.,  will  not  necessarily  fit  him 
for  the  position  of  arbiter  and  director  of  this  most  powerful 
factor  in  modern  business  —  advertising. 

This  sales  manager  must  also  be  an  advertising  judge,  and 
possibly  a  creator,  an  accurate  theorist,  a  producer  of  adver- 
tising through  an  execution. 

And,  on  the  other  hand,  merely  a  capable,  forceful,  brainy 
advertising  man  cannot  lay  claim  to  preference  as  sales  manager 
in  this  instance.  "Personal  appeal,"  "reason  why,"  "class 
copy,"  etc.,  mean  but  little  to  the  road-worn  salesman  fresh 
from  the  firing  line  of  contact  with  competition  and  skeptical 
buyers. 

He  must  have  this  put  to  him  in  the  language  of  his  craft, 
that  of  the  seller  —  the  man  who  has  been  there.  The  hardest 
thing  to  accomplish  in  the  sales  manager's  work  is  that  of 
convincing  the  salesmen  that  the  man  at  the  desk  really  knows 
anything  of  what  they  are  actually  up  against  in  their  daily  work. 

They  feel  that  it  is  all  well  enough  to  sit  in  the  office  and 
tell  how  it  should  be  done,  "but,  after  all,  the  boss  would  talk 
a  little  differently  if  he  had  ever  been  up  against  the  game 
himself,"  etc. 

Ninety-nine  per  cent,  of  our  advertising  men   have  never 

carried  a  sample   case,  nor   are   familiar   with  the   physical, 

rpr        practical  selling  of  merchandise.     For  the  most  part 

Selling  they  have  gravitated  into  the  business  from  the 
Knowledge  editorial,  the   newspaper,  or  magazine  field,  and  en 

a^m'^     route  have  gathered  a  lot  of  splendid  thought  and 

aft   experience,  but,  as  the  salesman  says,  "haven't  been 

up  against  the  real  cloven-hoofed  buyer  —  yet."     Hence  the 

danger  of  dependence  upon  the  "average"  advertising  manager 

for  the  handling  of  the  combined  sales  forces. 

The  sales  manager,  to  handle  the  combined  campaign, 
must  first  be  a  sales  manager  —  and  then  be  able  to  change 
desks,  if  need  be,  and  become  the  ad  man;  familiar  with  the 
bewildering  multitude  of  opportunities  for  costly  error,  for 
concealed  loss  of  expenditure,  and  for  the  elusive  dead-falls 
lying  in  wait  for  part  of  his  appropriation. 


CO-ORDINATION  323 

If  he  cannot  do  all  of  this  himself  he  must  have  the  level- 
headed common  sense  to  select,  carefully,  the  very  best  agency 
available  —  jpay  them  straight  commissions,  and  tie  up  with  them 
for  service  and  results.  He  must  know  how  much  help  the 
agency  will  require  of  him,  and  give  it.  He  must  know  what 
to  expect  from  the  agency,  and  insist  upon  getting  that. 

In  an  experience  of  fifteen  years  in  actual  selling,  in  sales 
organization  and  reorganization  —  sometimes  in  sales  adver- 
tising, sometimes  exclusively  selling  —  I  have  had  the  op- 
portunity, several  times,  of  correcting  a  bad  sales  policy, 
and  of  lessening  the  consequent  sales  cost,  by  consolidating 
the  sales  and  advertising  departments  under  a  single  directing 
head. 

In  certain  instances  both  organizations  were  good,  the  adver- 
tising, logical,  well  balanced,  and  properly  applied;  the  selling 
plan  correct  and  proving  effective;  both  departments,  individu- 
ally, doing  their  full  duty,  but  not  working  in  the  precise 
harmony  necessary  to  highest  sales  eJEciency,  and  particularly 
sales  economy. 

And  in  the  final  work-out  it  is  found  that  these  two  separated 
departments  are  working  along  lines  sufficiently  different  as 
to  lose  the  team-work  value  found  in  proper  combination. 
This  is  true  in  all  lines  of  human  endeavor,  military,  baseball, 
missionary,  financial,  etc. 

These  two  lines  of  procedure  cannot  be  perfectly  aligned 
when  two  or  more  men,  two  or  more  personalities,  ideas  and 
temperaments,  must  be  brought  into  such  intimate  relation 
as  is  necessary  to  low  sales  cost,  through  distribution,  and  dealer 
co-operation  secured  by  high  combined  efficiency. 

Therefore,  in  selecting  the  sales  advertising  head  the  ques- 
The  PI      ^^^^  ^^  choice  should  be   determined  by  the  quali- 

of  the     fications  of  the  individual,  rather  than  by  whether 

Gra-pe     he    be  a   salesman   or   an    advertising    man.      But 

Juice      \)^Q  direction  of  these  features  of  the  business  should 

toncern    ^^gj-tainly  be  centred  in  one  man. 

In  our  business  here,  we  entered  a  field  which  was  controlled 
by  two  brands  of  advertised  grape  juice,  and  a  dozen  makers 
of  the  identical  article  sold  under  many  brands,  but  all  of  the 
same  quality  and  value. 

A  preliminary  survey  of  the  field  demonstrated  that  nothing 
short  of  a  national  proposition  could  be  made  feasible  without 
a  tremendous   expenditure  of   time   and   money   in   sectional 


324        ADVERTISING  AS  A  BUSINESS  FORCE 

development.     A   national-initial-introductory  campaign  was 
decided  upon.     .     .     . 

The  grape  juice  "year"  only  covers  eight  months,  and  the 
actual  selling  is  done  during  the  cold  months  immediately 
preceding  the  spring  season,  when  soft  drinks  become  popular 
and  timely. 

It  was  found  necessary,  therefore,  to  accomplish  distribution 
at  a  time  when  there  is  but  little  consumer  demand  —  and  it 
is  indeed  difficult  to  introduce  a  new  article  except  under  actual 
advertising  then  running  and  in  sight.  It  is  also  most  unusual 
to  advertise  a  new  product  in  a  national  way,  out  of  season, 
without  having  first  secured  at  least  a  skeleton  distribution. 

Having  no  choice,  however,  the  best  plan  of  procedure  was 
next  to  be  determined  and  carried  out. 

A   complete   general    campaign   was   worked   out,  covering 

magazine  and  circular  copy.     A  sales  force  was  gathered  and 

trained  in  convention  of  district  sales  managers  at 

Opening    the  factory  in  December. 

oj  ".  -pjjg  entire  advertising  plan  was  gone  over  in  detail 

Campaign  with  these  district  salesmen,  until  they  were  as 
familiar  with  it  as  we  were  —  and  then  a  trade 
circular  was  prepared  which  carried  every  detail  of  the  cam- 
paign; covering  the  product,  the  factory,  the  advertising  (with 
specimen  copy),  selling  offers,  price  list,  etc.,  together  with  an 
exact  schedule  of  publications,  appearing  dates,  and  size  copy 
for  each  shown. 

This  trade  circular  was  mailed  to  each  of  100,000  dealers 
in  the  United  States  on  January  1st,  going  out  the  same  week 
as  our  first  advertisement  (  a  two-page  spread  in  the  Saturday 
Evening  Post)  appeared. 

Simultaneously  each  of  our  district  salesmen  appeared  in 
his  territory  with  one  or  more  thoroughly  coached  assistants, 
telling  the  same  story  as  told  by  the  trade  circular,  the  trade 
journals,  and  the  two-page  spread. 

This  all  occurred  in  January  —  three  months  before  the 
consumer  season  could  possibly  open.  The  plan  and  its  pur- 
pose were  frankly  and  honestly  made  clear  to  the  dealer,  whether 
jobber  or  retailer,  and  he  was  asked  to  buy  on  his  judgment 
of  the  outcome  of  it. 

Results:  In  January  we  booked  about  $100,000  worth  of 
business  for  immediate  delivery,  and  kept  that  stroke  up  until 
the  entire  trade  from  coast  to  coast  was  covered  by  our  intro- 


CO-ORDINATION  325 

ductory  selling.  Walker's  Grape  Juice  was  actually  in  the 
hands  of  over  46,000  dealers  by  June  1st,  less  than  sixty  days 
after  the  "season"  actually  opened  for  general  consumer 
demand. 

Nothing  but  concerted  action  from  all  directions  can  produce 
results  of  this  magnitude  within  that  space  of  time  and  under 
those  circumstances. 

The  analysis  of  conditions  must  be  right,  the  theory  of  the 
plan  correct,  the  agency  must  do  its  duty,  and  the  whole  scheme 
of  things  must  be  interlocked  and  executed  in  perfect  harmony 
and  accord. 

Obviously,  fwjo  "heads"  would  have  some  difficulty  in  main- 
taining the  same  exact  pace  —  so  we  adopted  the  very  simple 
jy,^      expedient  of  placing  the  entire  selling  organization 
Divisions  under  one  head. 

Under  The  sales  force,  sales  brokers,  etc.,  were  under  one 
One  Head  division  and  in  charge  of  an  assistant;  the  general 
publicity  campaign  handled  by  the  agency,  after  the  usual 
preliminary  conferences  and  decisions  as  to  copy  policy,  etc.; 
the  circular  work,  handling  of  display  material,  signs,  literature, 
etc.,  taken  care  of  by  another  assistant  in  his  division. 

The  traffic  and  general  business  features  were  grouped  in  a 
similar  manner,  and  proper  connection  established  with  the 
financial  department  as  regards  credits,  collections,  kicks, 
adjustments,  dissatisfactions,  etc.,  being  referred  to  the  sales 
department  for  disposition. 

The  workings  of  the  entire  organization,  as  above,  are  then 
segregated  and  grouped  in  such  a  way  as  to  relieve  the  general 
sales  manager  of  actual  details  bearing  upon  a  certain  part 
of  it,  but  bringing  everything  of  serious  import,  which  may 
require  special  disposition  or  a  special  ruling  for  future  guidance, 
to  his  immediate  attention  upon  occurrence. 

By  this  arrangement  every  condition  affecting  the  sale  of 
our  products  is  kept  before  the  sales  head,  who,  in  turn,  controls 
the  sales  producing  machine;  he  is  kept  fully  informed  regarding 
trade  conditions  in  each  territory,  and  can  direct  the  advertising 
effort  or  the  sales  operations  to  fit  the  exact  needs  of  any 
section.  At  the  same  time  he  controls  the  advertising  expendi- 
ture, as  well  as  the  sales  expense,  shaping  the  policy  to  conform 
to  conditions  found. 

A  full  set  of  estimates,  made  in  advance  of  actual  operation, 
covering  business  to  be  done,  territorial  subdivision,  expense 


326        ADVERTISING  AS  A  BUSINESS  FORCE 

in  its  various  classifications,  and  even  to  quantities  of  the  sized 
packages  needed,  remained  substantially  in  force  and  correct 
at  the  end  of  our  first  season. 

Now,  it  is  not  possible  for  a  single  individual  to  be  "every- 
thing in  everything,"  and  to  actually  handle  all  these  varied 
sections  of  the  marketing  organization,  nor  would  the  same 
result  be  possible  under  a  divided  effort  of  two  or  more  men. 
But  there  is  no  doubt  that  best  results  are  gotten  when  all  the 
different  features  bearing  upon  the  sale  of  a  certain  product 
are  centralized  in  such  a  way  as  to  bring  them  under  the  direc- 
tion of  one  dominating  idea,  and  are  executed  according  to  that. 

It  then  devolves  upon  that  individual  to  bring  about  the 
organization,  men  and  methods  for  carrying  out  the  composite 
plan. 

"Rather  one  poor  general,  than  two  good  ones." 

H.  P.  Dowst  of  the  H.  B.  Humphrey  Company,  Advertising 
Agents,  in  Boston,  at  a  recent  meeting  of  the  Pilgrim  Publicity 
Association,  gave  a  talk  in  which  he  emphasized  the  distinction 
between  "notifying"  the  selling  force  about  advertising  and 
"instructing"  them  about  it.  In  the  course  of  this  discussion 
Mr.  Dowst  sums  up  the  main  facts  of  this  entire  group  of 
problems : 

*I  talked  not  long  ago  with  the  New  England  manager  of 
one  of  our  biggest  advertising  textile  houses.  I  said,  "Your 
house  is  a  great  advertiser."  He  replied,  "Yes,  that's  so. 
I  wish  they  wouldn't  put  so  much  money  into  advertising,  but 
pay  us  salesmen  more  commissions." 

Do  you  think  the  house  that  man  sells  for  is  getting  value 
received  for  the  advertising  dollar.^*  Do  you  think  that  is  an 
isolated  case?     I  should  say  not. 

Now  if  you  will  get  the  average  salesman  into  a  corner  and 
question  him  about  the  advertising  of  his  house,  about  its 
effect  on  his  business;  the  attitude  of  the  retailer  toward  the 
house  and  its  advertising;  about  the  use  he  makes  of  the  ad- 
vertising argument  when  he  is  selling  goods,  what  will  he  do.'^ 
Usually  one  of  two  things:  he'll  duck,  or  else  he'll  give  you  the 
answers  he  thinks  you  want.     If  you  draw  him  out,  you  can  tic 

*Prinier$  Ink,  March  14,  1912,  p.  64. 


CO-ORDINATION  327 

him  up  in  bowknots  of  equivocation  and  evasion.  And  if  you 
were  to  make  a  tour  of  that  man's  territory  and  question  his 
customers,  who  are  or  should  be  handhng  your  goods,  you 
would  soon  find  out  why  some  advertising  doesn't  pay.  You 
would  find  just  how  little  those  retail  dealers  know  about  your 
goods  and  about  the  advertising  —  things  that  your  salesmen 
ought  to  have  taught  them. 

This  is  usually  not  the  salesman's  fault,  at  that.  Every  good 
salesman  wants  to  know  all  he  can  about  the  goods  he  sells; 
he  wants  all  the  arguments  that  will  help  him  place  goods  and 
secure  repeat  orders.  But  the  manufacturer  —  the  advertiser 
—  doesn't  instruct  him.     He  "notifies"  him.     That's  all. 

The  most  useful  ally  the  advertiser  can  have  is 

n  if      the  last  person  through  whose  hands  his  goods  must 

an  Ally    §^  before  they  reach  the  consumer,  and  that  is  the 
retailer  —  more  especially  the  retail  clerk. 

The  salesman  may  actually  succeed  in  placing  the  goods. 
He  stocks  the  retailer,  folds  up  his  order,  and  beats  it  for  the 
next  store,  or  the  next  town.  It  should  be  part  of  his  duty 
to  interest  the  retailer  in  the  goods  to  a  point  beyond  placing 
them  on  the  shelves.  He  should  give  the  retailer  information, 
the  enthusiasm,  the  inspiration  to  sell  those  goods  —  to  push 
them.  And  he  should  have  cultivated  in  him  by  his  employer 
and  the  advertising  man  the  powers  of  observation  that  will 
enable  him  to  make  an  intelligent  report  on  the  attitude  of  the 
dealer  toward  his  goods  every  time  he  calls  there.  He  should 
be  taught  how  to  gauge  the  effect  of  the  advertising  of  his 
house  in  every  locality  he  visits.  He  should  be  able  to  inform 
his  employer,  not  alone  that  A,  B  or  C  is  buying  his  goods, 
but  to  what  extent  A,  B  or  C  is  benefiting  by  reason  of  the  firm's 
advertising. 

What  is  the  relation  of  advertising  to  sales  .f*  It  is  really  a 
subordinate  one.  Thousands  of  firms  have  made  tremendous 
successes  in  spite  of  the  fact  that  they  have  not  advertised. 
You'll  have  to  admit  it.  And  it  w^on't  help  us  advertising  men 
much  to  say,  "Oh,  well,  just  think  how  much  more  successful 
you  might  have  been  with  the  help  of  advertising!"  And 
what  are  you  going  to  say  to  the  house  that,  after  years  of  non- 
advertising  success,  spends  a  big  appropriation  for  advertising 
with  no  results  .f' 

The  mill  won't  grind  again  with  the  appropriation  that 
is  spent;  you've  got  to  make  the  advertising  pay  while  the 


328        ADVERTISING  AS  A  BUSINESS  FORCE 

campaign  is  on,  and  the  only  way  to  do  that  is  through  intensive 
cultivation  by  the  selling  forces,  backing  up  the  advertising. 

When  you  go  to  the  foundation  of  this  relation 
Advertising  i^Qly^QQj^  advertising  and  sales  you  find  yourself  up 
Does^Not  ^g^i'ist  the  negative  conclusion  that,  except  in  a  small 
Sell      proportion  of  cases,  advertising  jper  se  does  not  sell 
goods. 
Advertising    attracts    attention,    arouses    interest,    creates 
desire  —  those  three  things,  in  the  order  named  —  attention, 
interest,  desire.     A  large  proportion  of  advertisements  pub- 
lished in  various  ways  do  certainly  attract  attention.     Some 
of  them  do  not  even  do  that,  but  most  of  them  do. 

A  large,  but  somewhat  diminished,  proportion  of  published 
advertisements  arouse  interest.  It  would  be  quite  impossible 
for  any  of  us  to  estimate  with  any  degree  of  accuracy  what 
proportion  of  advertisements  actually  do  create  desire.  It  is 
presumably  not  very  great,  but  we  are  striving  all  the  time  to 
make  that  proportion  greater  and  greater.  We  have  not  yet 
arrived  at  a  point  where  we  can  put  a  definite  finger  on  just 
the  qualities  of  a  published  advertisement  that  stimulate  in 
the  human  mind  a  genuine  wish  to  possess  the  goods  advertised. 
But  when  an  advertisement  has  really  made  its 
of  FaUurT  ^^^^^^  wish  he  owned  what  you  offer  for  sale,  has 
that  advertisement  on  that  account  been  successful.'* 
Not  necessarily.     Why  not  .5* 

1.  Because  the  person  in  whom  the  desire  is  created  may  not 
have  the  money. 

2.  If  he  has,  he  may  consider  the  purchase  an  extravagance. 

3.  He  may  forget. 

4.  He  may  be  located  where  the  goods  cannot  be  bought. 

5.  He  may  go  into  a  store  where  they  are  not  on  sale,  and 
accept  some  other  make  of  a  similar  kind  of  goods. 

6.  Even  if  he  goes  into  a  store  where  they  are  sold,  he  may 
be  induced  to  buy  something  else. 

These  six  and  many  other  conditions  not  mentioned  present 
just  so  many  separate  problems  for  the  advertiser  to  handle. 
In  even  the  most  favorable  of  circumstances  there's  many  a  slip 
'twixt  the  advertisement  and  the  sale. 

I  am  afraid  that  if  more  advertisers  understood  this,  two 
things  would  result:  First,  there  would  be  an  enormous 
shrinkage  in  the  amount  of  advertising  done,  for  when  some 
advertisers  who  are  to-day  spending  great  sums  for  space  realize 


CO-ORDINATION  329 

the  proportion  of  waste  that  they  are  paying  for,  they  would 
stop  advertising.     And  others  would  go  about  their  advertising 

with  more  painstaking  care. 
What  the        With  all  these  stumbling  blocks  in  the  way,  so 
Could  Do    nauch  in  the  way,  in  fact,  that  even  the  best  of  ad- 
vertising copy  may,  or  will,  to  a  greater  or  smaller 
extent,  fail  of  its  effect,  what  can  the  advertiser  do  to  bridge 
the  gap  between  his  publicity  and  the  consumer  he  seeks  for 
his  product? 

Educate,  educate,  educate  his  selling  forces ! 

We  want,  in  the  advertising  business,  not  more  honest  men, 
but  to  be  ourselves  more  honest.  We  need  to  be  more  frankly 
willing  to  recognize  the  difficulties  of  our  proposition;  to  study 
more  earnestly  the  essentials  of  our  calling.  We  hear  much 
about  "clean  advertising"  and  "honest  advertising."  But 
that  subject  will  never  be  adequately  covered  so  long  as  one 
professional  advertising  man  is  left  who  considers  the  sole 
requirement  of  a  good  advertiser  to  be  an  established  credit 
and  a  fat  checkbook. 

A  man  said   to  me   lately,  "The  advertising  man  has  got 

to  see  the  day  when  he  not  only  tells  his  customer  how  to 

The  Work  advertise,  but  can  go  into  his  factory  and  tell  him 

of  the  how  to  rearrange  his  machinery  to  increase  his 
Advertising  output    efficiency."     I    don't    believe  that.     But  I 

Alan  ^Q  believe  that  the  successful  advertising  man  of 
the  future  —  yes,  of  the  present  —  must  be  the  man  who 
goes  soberly  and  analytically  about  his  customers'  business 
with  the  one  idea  in  mind,  to  sell  goods  —  more  goods  —  at 
lower  selling  expense,  for  better  prices,  with  larger  profit. 

Buying  or  selling  space  and  filling  it  with  copy  —  ever  so 
good  copy  —  is  only  one  detail  of  such  an  advertising  man's 
work.  Organizing,  co-ordinating  and  facilitating  selling  — 
that  is  the  advertising  man's  task;  and  when  the  laws  of  this 
just  relation  between  advertising  and  sales  shall  have  been 
established  we  shall  rob  the  advertising  graveyard  of  its  prey, 
and  shall  knit  into  the  gospel  of  business  the  truism  of  our 
calling,  "Advertising  pays." 

REVIEW   QUESTIONS  —  CHAPTER   X 

1.  What  is  the  basic  difference  between  manufacturing  and 
selling  problems.'^ 


330        ADVERTISING  AS  A  BUSINESS  FORCE 

2.  What  are  some  of  the  main  features  of  the  selling  organiza- 
tion of  the  National  Cash  Register  Company? 

3.  What  is  the  peculiar  feature  of  the  relations  between 
the  advertising  and  selling  organizations  of  the  American 
Multigraph  Sales  Company? 

4.  How  does  the  National  Lead  selling  method  differ  from 
that  of  the  Cash  Register  and  Multigraph  companies?  How 
does  this  change  its  advertising  problems? 

5.  Are  there  any  essential  differences  between  the  advertising 
problems  of  the  National  Lead  Company  and  the  H.  J.  Heinz 
Company? 

6.  Do  you  agree  with  Mr.  Manning's  argument  that  the 
advertising  and  sales  managers  should  be  one?     Why? 

PROBLEM  QUESTIONS  —  CHAPTER  X 

1.  Make  a  list  of  cases  in  which  the  relations  between  the 
Multigraph  advertising  manager  and  sales  manager  might 
become  strained  under  the  form  of  organization  described. 
Compare  these  with  the  advantages  of  this  form  of  organization. 

2.  What  are  some  of  the  good  features  of  some  of  these 
specialty  selling  organizations  which  can  be  made  use  of 
by  concerns  selling  through  the  "regular"  jobber-retailer 
outlets?  Will  they  need  to  be  modified?  Make  a  list  of 
these  which  could  be  incorporated  into  the  selling  plans  of 
a  hammer  maker  selling  "regularly."  Do  the  same  for  a 
breakfast  food  maker  selling  "regularly." 


CHAPTER  XI 

TRADE-MARK   PROBLEMS 

THE  trade-mark  has  become  one  of  the  elements  of 
almost  every  successful  appeal  to  the  consumer. 
Trade-mark  development  involves  a  group  of  prob- 
lems which  are  among  the  most  important  of  those  which 
must  be  solved  by  any  advertiser  operating  on  any  considerable 
scale. 

We  shall  divide  our  discussion  of  trade-marks  into  five 
main  parts.  First  of  all,  we  shall  look  at  some  of  the  uses 
of  the  trade-mark.  And  then  we  shall  examine  some  of  the 
legal  aspects  of  exploiting  a  mark  of  this  kind.  The  remaining 
sections  of  the  discussion  will  be  devoted  to  a  consideration 
of  the  problems  of  trade-mark  selection,  of  problems  involved 
in  developing  a  well-defined  trade-mark  policy,  and  an  exami- 
nation of  some  of  the  advertising  and  selling  difficulties  asso- 
ciated with  trade-mark  exploitation. 

THE   USES   OF   THE   TRADE-MARK 

The  most  common  use  of  the  trade-mark  is  in  the  establish- 
ment of  identity.  And  in  this  case  we  find  that  the  trade- 
j,,  J,  ,  mark  partakes  of  the  nature  of  a  commercial 
mark  as  a  signature  for  its  exploiter.  Frederick  Arnold  Farrar, 
Commercial  advertising  manager  of  Adams  &  Elting  Company, 
manufacturers  of  Ad-el-ite  paints,  discusses  in  the 
following  terms  this  phase  of  the  uses  of  the  trade-mark  and 
the  methods  which  his  company  employed  in  impressing  their 
mark  on  the  public  mind: 

331 


332        ADVERTISING  AS  A  BUSINESS  FORCE 

*  He  saw  it  advertised  —  bought  it  —  liked  it  and  has  used 
it  ever  since.     That's  the  whole  story. 

The  article  was  trade-marked.  He  noticed  it  in  the  ad, 
on  the  circulars,  and  on  the  package.  It  was  distinct,  it  made 
an  impression,  and  when  here  turned  insisted  that  his  repurchase 
bear  the  same  character.  But  the  money  spent  in  production, 
advertising,  and  selling  would  have  been  lost  were  the  article 
wanting  in  quality. 

The  suggestive  trade-mark  plus  goods  of  permanent  quality 
become  builders  of  good-will  which,  by  the  way,  is  no  longer 
an  obscure  thing.  It  is  being  accorded  more  and  more  sub- 
stantial recognition  as  an  asset.  It  is  an  existing  advantage 
in  established  trade  relations  with  the  general  buying  public. 
It  is  measurable  and  definite,  is  reckoned  in  financial  dealings 
and  stands  in  the  courts. 

It  cannot  be  disassociated  with  the  handling  of  any  product 
and  in  outlining  the  experience  of  the  National  Biscuit  Com- 
pany, W.  W.  Green,  the  president,  takes  it  up  first:  a  view 
which  is  more  interesting  because  of  his  previous  experience 
as  a  corporation  lawyer. 

They  say  the  New  York  Herald  earns  between  $500,000 
and  $1,000,000  yearly.  Materially  its  chief  asset  is  the 
beautiful  building  in  Herald  Square.  If  that  should  burn 
up  to-night  there  would  be  nothing  left  of  the  Herald  materially 
to-morrow  morning.  Yet  its  mere  name  would  be  just  as 
valuable.  That  is  good-will.  In  a  recent  transaction,  involv- 
ing $450,000,  the  tangible  asset  of  the  company  amounted 
to  only  $50,000.  Four  hundred  thousand  dollars  was  for 
good-will  —  a  figure  set  as  the  value  created  by  the  familiar 
trade-mark  and  the  friendly  relation  existing  between  the 
consumer  and  the  product  covered. 

The  trade-mark,  however,  is  only  an  emblem.  It  actually 
produces  no  business  nor  has  it  in  itself  any  creative  power. 
The  value  lies  wholly  in  the  action  it  inspires,  its  ability  to 
suggest  by  continued  appearance,  to  create  sentiment,  to 
crystallize  opinions  and  eventually  to  build  markets. 

Powerful,  persistent  publicity  tends  to  invest  an  article 
with  more  value  in  the  purchaser's  mind  who  unconsciously 
associates  it  with  merit  and  becomes  predisposed  in  its  favor. 
You  know  that  the  manufacturer  has  put  his  best  into  it. 


*Printers  Ink,  September  29,  1910,  p.  20. 


TRADE-MARK  PROBLEMS  333 

He  could  not  afford  to  do  otherwise,  for  business  is  built  on 
faith,  and  to  destroy  confidence  is  to  kill  customers. 

The  Adams  &  Elting  Company  has  adopted  a  new  trade- 
mark —  a  rabbit  —  in  order  to  simplify  identification  of  all 
its  products  —  a  thing  which  is  needed  by  many  manufacturers. 
It's  a  promise  that  we  will  make  good. 

The  Ad-el-ite  Rabbit  will  be  found  on  everything  we  issue. 
By  its  persistency  every  label,  color  card,  advertisement, 
poster,  etc.,  will  each  bear  out  a  plan  and  become  a  link  in 
our  chain  of  selling  policy  to  establish  credit  with  the  public. 

Such  an  establishment  of  his  trade-mark  must  be  the  aim 
of  every  manufacturer. 

Not  the  least   important  of  the  uses  of  a  trade-mark  are 

those   which    are    associated   with    its    employment 

The  Trade-  ^^  g^  weapon  of  offence  and  defence  in  active  com- 

mark  as  a  .   .         ^  , 

Weapon  —  petition.      This  phase   of  the   trade-mark   question 

Offenswe     jg  discussed  as  follows  by  W.  W.  Garrison  of  the 
Defensive  Hudson  Motor  Car  Company: 

*.  .  .  .  "And  let's  think  up  a  trade-mark,"  is  usually  the 
first  idea  following  the  birth  of  the  new  business. 

Usually  you  will  find  the  trade-mark  is  used  as  a  weapon 
of  defence,  as  protection  against  the  substitution  of  the  goods 
by  the  retailer  and  to  guide  consumer  repeat  orders. 

But  there  are  few  national  advertisers  who  have  come  to 
the  "reason  why"  trade-mark  —  one  which  plays  the  double 
role  of  protector  and  salesman  of  the  goods.  It  is  a  powerful 
selling  force  if  adequately  equipped  to  occupy  a  position  on 
the  firing  line. 

An  Eastern  manufacturer  of  an  article  of  wear  some  years 
ago  was  undertaking  national  advertising  in  one  of  his  star 
lines.  He  and  his  advertising  counsel  were  working  hard  to 
conceive  a  name  and  a  new  trade-mark  for  the  product. 

It  was  for  the  exclusive  use  of  boys  and  men.  Dozens  of 
ideas  were  presented  and  one  after  another  discarded  because 
they  were  not  possessed  of  sufficient  attractiveness  to  tie  up 
with  the  line  and  its  field. 

It    was  just   at   the   time   the   Boy   Scout   movement  was 

^Printers   Ink,  April  11,  1912,  p.  3. 


334  ADVERTISING  AS  A  BUSINESS  FORCE 

being  launched  and  the  manufacturer  finally  came  to 
the  conclusion  that,  with   the  movement  growing  at  a  rapid 

A  Boy     ^^^^'  it  would  be  good  business  to  take  some  reflected 

Scout      glory  from  it  for  the  product. 

Trade-         The  name  "Boy  Scouts"  was  decided  upon,  and 

mark  incidentally  it  is  said  that  this  advertiser  was  one  of 
the  first,  if  not  the  first,  to  hook  this  line  to  the  movement. 
Then  came  the  matter  of  designing  a  trade-mark. 

This  was  given  considerable  thought.  The  advertising  man 
could  not  conceive  of  any  method  of  giving  the  trade-mark 
an  identity  as  a  selling  factor  until  he  hit  upon  the  idea  of 
designing  a  trade-mark  which  could  be  converted,  on  metal, 
into  a  pleasing  little  charm  —  "Boy  Scout"  charm,  it  was 
called  —  and  presented  to  youthful  purchasers  with  the 
product. 

The  trade-mark  was  drawn  up,  the  design  placed  upon  the 
goods  and  duplicates  of  it  on  metal  were  made  for  use  as 
charms.  Advertising  copy  was  written  in  which  the  combined 
charm  and  trade-mark,  occupying  the  dual  role  of  selling 
aid  and  protection,  was  featured  toward  the  bottom  of  the 

copy. 

Then  a  circular  to  dealers  was  whipped  into  shape,  showmg 
the  complete  scheme,  the  selling  plan,  the  copy,  the  trade- 
mark charm,  and  the  advertising  schedule. 

The  dealer  was  given  visions  of  the  hordes  of  youthful 
prospects  whom  the  idea  would  attract;  the  additional  feature 
of  the  charm,  how  dealers  who  took  on  the  line  were  protected 
against  substitution  by  others  because  of  the  indelible  trade- 
mark impression  left  by  charm  as  well  as  other  potent  features 
in  connection  with  the  campaign. 

After  the  salesmen  had  begun  to  report  and  the  dealer 
circulars  had  begun  to  bring  in  the  orders,  it  became  a  cer- 
tainty that  the  campaign  would  be  a  success  — this  before 
a  line  of  the  advertising  had  been  placed.  In  fact  the  orders 
that  resulted  from  the  presentation  of  the  scheme  of  operation 
to  retail  merchants  more  than  paid  for  the  advertising.  It 
financed  the  campaign. 

When  the  plan  was  put  up  to  the  consumer,  there  was  instant 
evidence  that  it  was  moving  the  goods  off  dealers'  shelves 
and,  as  regularly  as  the  sales  were  made  by  the  merchants, 
the  purchasers  requested  the  charms,  leaving  in  the  latter's 
hands  tangible  evidence  of  the  fact  that  the  next  purchase 


TRADE-MARK  PROBLEMS  335 

of  such  goods,  providing  this  manufacturer's  product  was 
satisfactory,  would  be  the  "Boy  Scout"  brand. 

The  preservation  of  the  trade-mark  charm,  even  though 
for  only  a  short  time,  was  sufficient  to  keep  the  goods  in  mind 
long  enough  to  insure  the  memory  of  the  name  when  the  next 
occasion  came  to  buy.  In  addition,  the  purchaser's  request 
for  the  charm  absolutely  prevented  the  possibility  of  substi- 
tution without  considerable  argument  pro  and  con  with  the 
prospective  customer. 

Here  was  an  example  of  the  successful  use  of  a  trade-mark 
in  selling,  as  well  as  in  its  ordinary  protective  function.     .     .     . 

A  manufacturer  of  a  product  nationally  known  was  the 
first  to  bring  his  goods  into  the  market;  goods  of  this  especial 
type. 

His   first   act   was   to   select  a  name    and   have   it    drawn 

Tj     »»T    _  in  script  letters  to  serve  as  a  trade-mark.     The  name 

Shrinkable"  ^^^  not  "  Non-Shrinkable, "  but  that  will  serve  the 

Failed  as  purpose,    for   he   picked    a   name    which    described 

a  Trade-   \}iq  product  and  it  looked  like  a  sound  proposition 

^  for   he   had    no   competition    whatever.       His  were 

the  first  goods  of  this  type  to  be  offered  for  sale. 

He  gave  agencies  for  the  goods  in  many  cities  to  individual 
dealers. 

Then  he  advertised  "  Non-Shrinkables "  heavily,  and  made 
strong  efforts  to  impress  the  trade-mark  upon  the  consumer, 
which  he  did.  He  found  that  he  was  sending  trade  into  his 
agencies  at  a  fairly  fast  clip. 

Suddenly  he  discovered  that  a  retail  merchant  who  also 
jobbed  goods  was  selling  a  line  of  articles  in  his  store  in  a 
Western  city  which  were  of  the  type  this  manufacturer  was 
marketing.  The  merchant  had  apparently  felt  that  his  com- 
petitor, who  held  the  manufacturer's  agency,  was  getting  a 
good  deal  of  business  on  the  "Non-Shrinkables,"  so  he  con- 
ceived the  idea  of  duplicating  the  product. 

But  he  did  not  duplicate  the  trade-mark  in  any  way.  For 
the  purpose  of  this  story  we  will  say  that  the  goods'  chief 
qualification  was  the  ability  to  resist  shrinkage. 

He  used  a  coined  name  and  trade-mark  which  were  not 
descriptive  of  the  goods.  Apparently  it  was  by  accident  that 
he  happened  to  follow  that  course. 

But  when  a  customer,  who  had  seen  the  national  advertising 
of  the  "Non-Shrinkables,"  walked  into  the  department  in  the 


33G        ADVERTISING  AS  A  BUSINESS  FORCE 

latter's  store  which  handled  goods  of  this  type  and  asked  for 
the  nationally  advertised  product,  the  attempt  was  made  to 
substitute.     It  proceeded  much  in  this  way: 

Customer  —  "I  want  to  get  a  ' Non-Shrinkable ' ." 

The  store  did  not  handle  the  goods,  but  nevertheless  the 
clerk  would  lay  a  quantity  of  this  merchant's  own  trade- 
marked  imitation  on  the  counter.  The  customer  would  look 
them  over. 

"These  are  'Non-Shrinkables,'  are  they.'*"  the  customer 
would  ask. 

"Oh,  yes,"  the  clerk  invariably  replied,  "they  are  non- 
shrinkable."  He  had  described  the  competing  merchant's 
goods  by  naming  the  selling  point  which  they  both  had.  They 
usually   satisfied   the   customer  —  it   went  with   the  average. 

The  goods  were  wrapped  up,  the  money  paid  over  and  the 
substitution  culminated.  The  clerks  got  away  with  it  readily, 
for  they  had  a  descriptive  trade-mark  and  name  to  oppose. 

In  most  industries  the  adoption  of  a  descriptive  trade-mark 
is  the  "open  sesame"  for  competitive  vultures.  It  allows 
substitution  to  an  enormous  degree,  for  when  the  customer  asks 

if    these    are goods,  the  clerk  merely  has  to  reply  they 

are  — .     That   usually   effects   the   substitution.     Even   the 

trade-mark  design  can  scarcely  thwart  such  substitution,  for 
its  memory  cannot  be  impressed  indelibly  upon  the  average 
consumer  mind  —  not  for  sufiicient  length  of  time. 

As  a  result  of  the  competitive  merchant's  coup  told  above, 
a  manufacturer  learned  of  his  success  and  soon  a  substitute 
with  the  same  selling  point  appeared  in  the  field.  It  cut  a 
big  dent  in  the  original  manufacturer's  trade.  Then  came 
another  and  another,  until  to-day  there  are  scores  of  substitutes 
whose  entire  business  has  been  built  upon  the  flaw  in  picking 
a  trade-mark  and  name  and  the  exclusive  agency  beginning. 

That  illustrates  the  trade-mark  name,  which,  though  success- 
ful when  the  field  was  non-competitive,  lost  ground  later 
and  was  the  foundation  for  the  inroads  of  other  makers. 

A  score  of  years  ago  or  more  a  hard-headed  Middle- Western 
business  man  secured  a  patent  on  an  especially  good  article 
of  wear  for  small  children. 

Another        jj^  ^g^g  planning  to  market  it  and  had  already 

Weapon  n^^de  his  manufacturing  arrangements  when  he  be- 
thought himself  of  the  protection  of  his  goods  in  the 
hands  of  the  retail  merchant.     This  evolved  itself  into  the  hunt 


TRADE-MARK  PROBLEMS  337 

for  a  .suitable  method  of  identification,  other  than  merely  the 
use  of  the  firm  name. 

The  search  was  a  long  one,  but  he  steered  clear  of  the  snag 
that  beset  the  manufacturer  told  of  above.  He  somehow  felt 
that  his  trade-mark  design  should  be  a  selling  force  in  itself. 
It  should  describe  the  goods  in  some  way  and  indicate  to  the 
consumer's  mind  its  advantages  to  small  children. 

But  how  on  earth  to  achieve  his  purpose  was  a  puzzle.  He 
really  wanted  to  make  the  trade-mark  do  too  much  work  he 
figured,  yet  he  thought  it  should  be  a  weapon  of  offence  as  well 
as  defence. 

One  of  his  first  acts  when  he  decided  to  get  into  the  business 
with  the  patented  garment  was  to  have  his  wife  decide  what 
she  thought  of  it  for  their  own  child,  a  girl  of  between  five 
and  six  years  of  age.  The  verdict  was  highly  satisfactory 
and  the  child  continued  to  wear  garments  of  this  kind,  because 
the  mother  had  made  a  discovery  of  their  worth.  So  he  had 
finally  decided  to  enter  the  business. 

Later  the  hunt  for  the  trade-mark  began. 

One  evening  the  child  was  being  towed  to  bed  by  its  mother. 
The  little  girl  had  forgotten  to  say  " good-night  to  papa."  So 
the  little  one  crept  out  into  the  lighted  room  where  the  parents 
were  seated,  made  a  dash  for  "her  papa"  and  that  instant 
the  idea  for  the  trade-mark  hit  him  square  between  the  eyes. 

It  was  his  own  little  girl  in  the  garment  he  was  going  to 
sell.  It  was  the  very  thing  he  had  been  hunting  for.  A 
photograph  of  the  child  encased  in  the  garment  first  achieved 
the  desired  end,  viz.,  to  describe  its  use  and  its  advantages. 
It  was  a  real  weapon  of  offence  —  a  selling  factor. 

It  had  the  additional  feature  of  protecting  the  goods  in  the 
dealer's  hands  and  identifying  the  product  when  the  consumer 
desired  to  re-order. 

In  accordance  with  the  plan  the  photographs  were  made, 
showing  thoroughly  the  function  of  the  patented  article, 
how  it  was  put  on  and  made  to  stay  on  and  its  appearance 
in  general. 

That  was  probably  as  long  as  twenty  years  ago.  The  trade- 
mark was  featured  on  the  goods  and  in  the  extensive  advertising 
which  backed  up  their  sale.  The  trade-mark,  this  manufacturer 
believes,  was  a  strong  advantage.  He  believes  it  responsible 
for  a  large  share  of  the  immense  success  he  has  had  and  from 
the  copy  which  has  been  run  and  is  appearing  to-day,  it  is 


338        ADVERTISING  AS  A  BUSINESS  FORCE 

generally  considered  that  the  elimation  of  the  halftone  would 
considerably  weaken  its  effectiveness.  Hence  it  is  a  selling 
aid. 

To-day  the  girl  of  the  trade-mark  is  a  grow^n  woman  and 
has  children  of  her  own,  but  as  a  little  girl  on  paper  she  still 
helps  her  father  sell  goods.  He  is  a  mighty  rich  manufacturer 
right  now  and  a  large  amount  of  the  success  of  his  business 
must  be  credited  to  this  idea. 

Much  the  same  sort  of  an  idea  for  a  trade-mark  was  con- 
ceived by  a  varnish  manufacturer.  To  prove  the  hardness  of 
his  varnish  after  a  floor  has  been  coated  with  it,  he  adopted 
as  a  trade-mark  a  photograph  of  his  son  aboard  a  rocking- 
horse  on  a  newly  varnished  floor.  You've  seen  it,  but  perhaps 
didn't  know  how  close  to  home  the  trade-mark  originated. 

It  was  a  real  selling  trade-mark,  in  that  it  proved,  by  means 
of  the  actual  photograph,  that  the  floor  could  not  be  easily 
marred.  Being  able  to  feature  it  strongly  in  the  advertising  — 
because  it  was  an  actual  selling  factor  —  allowed  it  to  be 
pretty  well  impressed  upon  the  consumer's  mind  and  thus  it 
afford  the  desired  protection  against  substitution  in  a  large 
measure. 

The  Ostermoor  trade-mark  and  that  of  Pratt  &  Lambert, 
varnish  manufacturers,  are  trade-marks  that  serve  as  weapons 
of  offence  as  well  as  defence,  while  the  Dutch  girl  of  Old  Dutch 
Cleanser  possesses  that  quality  because  of  the  reflection  of  the 
cleanliness  of  the  Dutch.  They  prove  a  selling  point  in  each 
case. 

The  Victor  trade-mark  has  partial  value  as  to  selling  force. 

The  Peters  Chocolate,  B.  V.  D.,  Wilbur's  Chocolate  Buds, 
and  Barrett  Manufacturing  Company  trade-marks  are  merely 
defensive  trade-marks,  having  no  selling  value.  They  are 
probably  not  meant  to  have. 

It  is  good  logic  to  suppose  that  a  "reason- why  "  trade-mark  — 
which  serves  for  both  selling  and  protection  —  is  doubly 
efficient  as  protection  and  has  selling  force  of  great  value. 
It  is  merely  a  way  of  making  the  mark  serve  a  double  purpose  — 
the  incidents  above  prove  the  success  of  the  plan. 

TRADE-MARKED  PRODUCT  FAMILIES 

There  are  cases  almost  without  number  of  a  trade-mark, 
well  established  in  connection  with  one  line  of  goods  being 
used  for  securing  a  favorable  reception  for  other  lines  produced 


TRADE-MARK  PROBLEMS  33!) 

by  the  same  concern.  This  business  of  developing  a  family 
of  products  about  a  single  trade-mark  is  one  of  the  most 
interesting  developments  in  connection  with  trade-mark  exploi- 
tation. The  following  editorial  from  Printers^  Ink  touches 
some  phases  of  this  subject: 

*  .  .  .  .  During  the  past  year  or  more  there  has  been 
a  surprising  increase  of  birth  rate  in  manufacturing  families. 

P  od  ct  Additional  products  have  been  announced  almost 
Families  every   month   by  already  well-established  concerns. 

Built  on    The  makers  of  Ivory  Soap,  though  already  heavy 

Trade-     manufacturers    of    other    laundry    products,     have 

^^''  *  announced  a  new  member  of  the  family  —  a  vege- 
table shortening.  Libby,  McNeill  &  Libby  (part  of  the 
Armour  family)  have  announced  the  purchase  of  the  old  Sea 
Foam  baking  powder. 

Perhaps  more  interesting  than  any  instance  is  the  expansion 
of  the  Corn  Products  Refining  Co. 

According  to  an  official,  that  company  has  gone  into  the 
business  of  manufacturing  jams  and  jellies,  and  is  interested 
with  others  in  the  manufacture  of  molasses.  During  the  last 
year  Corn  Products  Refining  Co.  bought  complete  control  of 
St.  Louis  Preserving  Co.,  in  which  it  had  held  an  interest  for 
some  time  previous.  The  latter  company  consumes  about 
25,000  barrels  of  glucose  a  year.  It  is  the  intention  of  Corn 
Products  Co,  to  erect  a  new  plant  for  the  making  of  jams 
and  jellies  at  Granite  City,  Mo.,  and  soon  to  begin  selling 
and  advertising  them  under  the  Refining  Co.'s  own  name. 

In  addition  to  this  extensive  acquisition,  the  same  company 
has  bought  the  Novelty  Candy  Co.,  and  is  already  taking  steps 
to  advertise  nationally  a  popular-priced  brand  of  candy. 

Manufacturers  who  fondly  imagine  they  can  beat  the  world 
with  one  product  might  profitably  take  thought  at  this  tendency 
toward  expansion.  A  salesman  can  talk  five  or  six  allied  lines 
to  dealers  and  wholesalers  at  very  little  more  expense  than  one; 
and  a  single  trade-mark  or  good-will  reputation  is  perfectly 
competent  to  support  a  line  of  products  and  advertise  them 
at  a  far  lower  cost  per  unit  than  a  single  article  could  be 
exploited. 

*Printers  Inic,  April  20,  1911,  p.  65, 


340        ADVERTISING  AS  A  BUSINESS  FORCE 

Other  cases  of  product  families  are  described  by  H.  L. 
Allen,  who  relates  the  experience  of  a  number  of  concerns 
whose  use  of  this  feature  of  trade-mark  value  has  met  with 
success. 

.  .  .  .  *Few  live,  ambitious  concerns  nowadays  manu- 
facture and  sell  but  one  article.  There  will  be  fewer  in  the 
future,  for  both  selling  and  manufacturing  economy  is  against 
it.  A  "family"  of  products  seems  to  be  the  natural  and 
sensible  evolution  —  as  natural  as  the  Darwinian  evolution 
from  single  cell  protozoa  to  mammals. 

This  evolution  can  come  about  in  either  of  two  ways.  A 
manufacturer  of  a  single  article  may  use  the  strength  of  its 
reputation  (especially  if  it  is  well  advertised  to  consumers) 
in  making  a  market  for  an  entire  line  of  articles;  or  a  manufac- 
turer of  a  large  line  of  goods  may  select  one  of  his  articles 
upon  which  to  build  concentrated  consumer  reputation,  and 
after  a  sufficient  lapse  of  time,  may  begin  to  saddle  the  repu- 
tation of  this  star  product  upon  its  satellites  until  they,  in 
turn,  grow  to  be  of  the  first  magnitude. 

A  number  of  instances  may  be  cited  of  manufacturers  who 
have  graduated  from  the  Kindergarten  of  Specialties  to  the 
University  of  Allied  Products.  One  of  the  most  striking  is  to 
be  had  in  the  case  of  the  Glidden  Varnish  Company,  Cleveland. 
The  "evolution"  is  not  yet  complete,  but  it  is  arriving.  This 
company  falls  into  the  second  class,  as  enumerated 
The  Case  of  g^^jQyg      j^  produces  a  great  number  of  allied  prod- 

'^^'"  "  ucts.  Jap-a-lac  only  happens  to  have  become 
star,  in  this  case  more  accidentally  than  intentionally.  Even 
now,  with  its  big  sales,  Jap-a-lac  is  but  a  fraction  of  the 
company's  output  —  yet  consumers  have  known  little  of 
the  Glidden  Varnish  Company's  other  products.  The  name 
"Glidden  Varnish  Company"  is  now  being  made  much 
more  prominent,  and  the  time  is  coming  when  the  reputation 
of  the  Glidden  concern  will  be  coupled  with  one  after  another 
product. 

Practically  the  same  thing  is  being  attempted,  in  a  little 
different  way,  by  Hammacher,  Schlcmraer  &  Co.,  New  York, 
which  is  advertising  and  pushing  its  popular  tool  sets,  the 
manufacture  of  which  comprises  a  fractional  part  of  the  busi- 

*Printers'  Ink,  June  30,  1910,  p.  3. 


TRADE-MARK  PROBLEMS  341 

uess.  But,  on  the  basis  of  these  cabinets  of  tools,  a  popular 
and  technical  reputation  is  being  built  up. 

Prominent  among  the  manufacturers  who  are  gradually 
developing  a  family  of  products  is  the  Rubberset  Company, 

Hoio  the  ^^  Newark.  Few  better  examples  of  advertising 
Rubberset  evolutions  are  to  be  had.      Upon  the  death  of  his 

Family  father,  some  four  years  ago,  Andrew  Albright,  Jr., 
^'"^'"  succeeded  to  the  head  of  the  old  Rubber  &  Cellu- 
loid Harness  Trimmings  Company,  and  was  imbued  with  an 
enthusiasm  to  advertise.  With  the  growth  of  the  automo- 
bile business,  Mr.  Albright  believed  he  saw  a  serious  decline  in 
the  business  of  manufacturing  harness  trimmings.  In  his 
search  for  something  else  to  specialize  upon  he  turned  to  the 
business  of  brush  making. 

His  father  had  perfected  an  old  invention  for  setting  bristles 
in  hard  rubber,  so  that  they  would  not  come  out.  In  spite  of 
the  incongruity  of  a  harness  trimmings  company  pushing 
brushes,  the  latter  had  been  sold  in  a  desultory  way  through 
salesmen.  Mr.  Albright's  first  move  was  to  organize  the  Rubber- 
set  Company,  a  name  which  covered  all  his  lines.  He  had 
shaving  and  paint  brushes  —  both  unadvertised.  The  question 
arose:  Which  first?  The  simultaneous  popularity  of  safety 
razors,  which  were  being  advertised  strongly  then  for  the  first 
time,  militated  in  favor  of  the  shaving  brush.  It  was  made 
the  Rubberset  Company's  first  specialty,  and  the  paint  brush 
was  reserved  for  later  exploitation. 

The  Rubberset  Company's  reputation  was  built  up  on  the 
basis  of  its  shaving  brushes.  The  second  member  of  the  family 
to  be  introduced  to  the  country  by  the  advertising  stork 
was  the  Berset  Shaving  Cream,  a  natural  evolution  of  the 
shaving  brush.  Opportunity  for  the  launching  of  the  paint- 
brush advertising  was  obviously  at  hand  when  the  magazines 
began  to  groan  with  pages  upon  pages  of  paint  ads,  those  of 
the  Glidden,  Sherwin-Williams,  National  Lead,  and  Acme 
Lead  companies,  not  to  mention  a  host  of  others,  all  talking 
for  home  consumption  of  paint.  Professional  painters  had 
before  that  not  taken  readily  to  Rubberset  paint  brushes, 
because  of  their  cost.  But  it  was  believed  that  the  domestic 
dauber  of  woodwork  and  furniture  could  be  shown  —  helped 
by  the  prestige  of  the  shaving  brush  —  how  a  Rubberset 
brush  was  economical  and  reliable. 

At  present  the  younger  brother  of  the  Rubberset  family  is 


342        ADVERTISING  AS  A  BUSINESS  FORCE 

Master  Tooth  Brush.  He  is  the  evohition  suggested  by  the 
vast  amount  of  advertising  which  has  been  lately  given 
various  dental  preparations  and  the  growth  of  popular  interest 
in  the  hygiene  of  the  mouth.  In  this  case  so  great  has  been 
the  accumulated  power  of  Rubberset  reputation  that  almost 
the  mere  mention  of  the  fact  that  a  Rubberset  tooth  brush 
was  on  the  market  produced  such  a  demand  that  it  could  not 
be  met.     It  resulted  in  not  a  little  regrettable  difficulty. 

When  recently  asked  as  to  the  extent  to  which  each  suc- 
ceeding member  of  the  Rubberset  family  has  benefited  by 
the  advertising  given  its  predecessors,  T.  B.  Denton,  the  adver- 
tising manager  of  the  company,  referred  to  the  tooth  brush 
experience  as  follows :  "  Each  product  has  been  able  to  make  its 
start  miles  ahead  of  where  the  one  before  it  was  compelled 
to  start  its  race  for  public  favor.  Indeed  this  cumulative 
appreciation  on  the  part  of  the  consumers  of  what  our  name 
stands  for  got  us  into  trouble  when  it  came  to  the  Rubberset 
Tooth  Brush.  We  planned  the  initiation  of  our  tooth  brush 
months  ahead,  and  ordered  advertising  in  the  March  issues. 
No  labor  familiar  with  the  manufacturing  of  tooth  brushes 
being  available  in  Newark,  we  had  to  open  a  school  of  instruc- 
tion, and  teach  our  help.  Mr.  Albright  estimated  that  if 
we  had  a  million  brushes  on  hand  before  the  advertising  started 
that  would  be  enough. 

"  We  made  up  the  million.  But  so  great  has  been  the  demand 
for  Rubberset  Tooth  Brushes,  as  the  result  of  what  was  prac- 
tically a  mere  mention  of  it  in  the  advertising  pages,  that  we 
are  to-day  2,000  gross  behind  in  our  orders  from  dealers,  in 
spite  of  the  fact  that  we  are  making  twenty  to  thirty  gross 
a  day,  an  amount  far  in  excess  of  what  we  expected  to  make. 
Because  of  our  inability  to  make  deliveries,  we  have  given 
ourselves  no  end  of  trouble  with  our  long-standing  dealers. 
We  have  canceled,  for  the  present,  what  Rubberset  Tooth 
Brush  space  we  had  secured,  wherever  possible.  A  recent 
back  cover  on  Collier's^  which  could  not  be  canceled  on  such 
short  notice,  and  which  had  been  originally  intended  for 
tooth  brush  advertising  alone,  was  divided  up  into  quarters, 
and  one  each  given  to  the  shaving  brushes,  paint  brushes, 
dental  cream  and  tooth  brushes." 

The  Rubberset  Tooth  Brush  success  is  naturally  bringing 
about  the  evolution  of  the  dental  cream,  which  is  to  be  the 
next  member  of  the  Rubberset  family.     Later  on  a  Rubberset 


TRADE-MARK  PROBLEMS  343 

Hair  Brush  and  a  Rubberset  Nail  Brush  are  to  be  exploited. 
But,  in  these  instances,  foreseeing  a  monster  demand,  because 
of  the  reputation  of  the  trade-mark  now,  pains  will  be  taken 
to  have  sufficient  a  supply  on  hand  when  the  announcements 
are  made. 

Another  example  is  the  J.  Hungerford  Smith  Company, 
Rochester,  now  advertising  Golden  Orangeade,  a  temperance 

Some      ^ri^^k,   in   New   England.      The   expenditure    being 

Other  made  is  a  considerable  one.  But  when  the  proper 
Well-     psychological  moment  arrives,  the  valuable  reputa- 

knoiin     {ion   which   Golden   Orangeade  will  have  made  for 

Cases  i^ggjf  jg  going  to  be  used  to  boost  a  whole  family 
of  temperance  drinks  by  a  well-thought-out  plan  of  natural 
development. 

Not  infrequently  a  concern  is  met  with,  which  is  putting  out 
such  an  aggregation  of  products  that  it  would  be  well-nigh 
impossible  to  advertise  them  all.  Some  of  them  may  be  for 
such  special  uses,  too,  that  it  would  be  impractical  to  do  so. 
For  instance,  not  even  the  most  enthusiastic  believer  in  adver- 
tising could  very  well  assert  that  Colgate  &  Co.  is  a  backward 
advertiser.  Yet,  if  every  Colgate  product  were  adver- 
tised like  shaving  powder  and  dental  cream  are,  the  magazines 
would  have  to  build  on  additions.  Out  of  some  225  or  more 
products,  probably  not  more  than  an  eighth  of  these,  at  the 
most,  are  advertised  at  all  extensively.  Yet  nobody  can  tell 
how  much  the  reputation  of  the  advertised  products  helps 
the  unadvertised  products.  A  woman  goes  into  a  drug  store 
to  get  smelling  salts.  She  doesn't  know  brands.  She  doesn't 
know  Colgate  has  smelling  salts,  but  when  the  clerk  shows 
the  latter  to  her,  the  sale  is  a  foregone  conclusion.  What  has 
brought  it  to  pass?  The  reputation  based  on  the  advertised 
Colgate  products. 

The  Johnson  &  Johnson  (New  Brunswick,  N.  J.)  red  cross 
on  bandages,  absorbent  cotton,  and  a  host  of  allied  products, 
has  represented  a  standard  for  a  quarter  of  a  century  or  more. 
When,  two  years  ago,  a  shaving  cream  was  perfected,  the  temp- 
tation with  the  older  officials  of  the  concern  was  to  push  it 
along  the  already  established  channels  of  distribution,  namely, 
by  salesmen  who  have  long  known  the  trade,  rather  than  by 
advertising. 

But,  fortunately,  some  one  saw  the  light.  The  result  was 
that,  after  a  two  years'  period  of  samphng  the  physicians  and 


344        ADVERTISING  AS  A  BUSINESS  FORCE 

druggists,  Johnson  Shaving  Cream  was  first  advertised  last 
February.  Since  then,  it  is  reported,  Johnson  &  Johnson  have 
received  more  inquiries,  and  have  witnessed  more  widespread 
interest  in  this  shaving  cream  than  in  any  other  product 
ever  put  out  by  the  house. 

LEGAL   ASPECTS   OF   THE   TRADE-MARK 

Arthur  E.  Goddard,  in  an  article  entitled  "Trade-marks  — 
What  They  Mean  in  the  Eyes  of  the  Business  Man  and  the 
Law,"  outHnes  some  of  the  principal  phases  of  the  legal  aspects 
of  trade-mark  selection  and  protection: 

*In  these  days  when  advertising  plays  an  all-important  part 
in  business,  when  the  man  who  makes  himself  heard  and 
becomes  known  is  the  one  who  gets  ahead,  it  is  natural  that 
practically  every  commodity  on  the  market  should  have  a 
distinctive  trade-mark.  For  trade-marks  are  the  only  means 
of  protecting  the  results  of  advertising  and  enterprise  from  the 
unscrupulous  hordes  of  "imitators." 

Although  it  seems  inconceivable  that  business  could  be 
carried  on  without  such  protection,  as  a  matter  of  fact  the 
law  relating  to  trade-marks  is  of  comparatively  recent  develop- 
ment. It  is  true  that  as  early  as  the  year  1590  a  clothier  in 
England  brought  a  successful  suit  for  damages  upon  the  quaint 
charge  that:  "Whereas  he  had  gained  great  reputation  for  his 
making  of  his  cloth  by  reason  of  which  he  had  great  utterance 
to  his  great  benefit  and  profit,  and  that  he  used  to  set  his 
mark  to  his  cloth  whereby  it  should  be  known  to  be  his  cloth; 
and  another  clothier,  perceiving  it,  used  the  same  mark  to 
his  ill-made  cloth  on  purpose  to  deceive."  But  it  was  not 
until  centuries  later  that  the  courts  would  take  serious  notice 
of  such  trivial  matters  as  trade-marks,  and  not  until  about  1850 
that  the  law  became  settled  to  any  extent.  Recently  there 
has  been  a  great  mass  of  litigation  covering  this  important 
phase  of  business,  and  the  courts  have  passed  upon  trade- 
marks for  almost  everything  from  printing  presses  to  peanuts. 

The  action  for  damages  gradually  gave  way  to  the  much  more 
adequate  relief  of  injunction  for  two  very  good  reasons:  First, 
because  of  the  difficulty  of  proving  damages  caused  by  the 

*System,  May,  1911,  p.  489. 


TRADE-ISIARK  PROBLEMS  345 

infriugement;  and,  second,  because  of  the  sad  fact  that  imi- 
tators, as  a  class,  are  not  persons  of  great  financial  responsi- 
bility, and  judgments  for  damages  against  them  are  generally 
so  much  waste  paper. 

Nowadays  the  infringer  is  served  with  a  temporary  injunc- 
tion pending  the  suit,  and  with  a  permanent  judgment  after 
the  case  has  been  tried.     Then,  if  he  feels  unable 

What      |.Q  gjyg  yp   }jjg   newly   acquired  business,    he   finds 

fT/"^  himself  in  jail  for  contempt  of  court.  In  addition 
Infringer  ^o  all  this  punishment  the  court  will  give  a  money 
judgment  for  such  damages  as  can  be  shown  by 
the  injured  party. 

Viewed  through  the  learned  spectacles  of  the  law,  a  trade- 
mark assumes  a  complicated  aspect.  It  has  been  defined  as 
"a  name  or  a  device  or  a  peculiar  arrangement  of  words,  lines, 
or  figures,  or  any  peculiar  mark  or  symbol,  adopted  and  used 
by  a  manufacturer  or  a  merchant  for  whom  goods  may  be 
manufactured,  to  designate  them  as  those  which  he  manu- 
factures or  sells.  It  may  be  put  either  upon  the  article  itself, 
or  on  its  case,  covering,  or  wrapper." 

Although  this  definition  does  not  sound  formidable,  the 
close  cases  which  arise  under  this  branch  of  law,  as  under  every 
other,  make  necessary  certain  general  rules  which  business 
men  should  know. 

A  trade-mark  is  recognized  and   protected  by  the  law   not 

only   for   the   sake  of    the   manufacturer    or    dealer    (who  is 

generally  the  only  one  who  finds  it  worth  while  to 

^hat  a  y^Ying  such  matters  to  court),  but  also  as  a  protec- 

'^Must^Be   ^^^^   ^^^  ^^^   purchasing    public,  which,    of   course, 

cannot  afford  to  litigate  every  time  it  is  taken  in  by 

an  infringing  trade-mark  on  an  article  costing  a  few  dollars  or 

even  less. 

Some  confusion  exists  in  the  popular  mind  concerning  the 
relation  to  each  other  of  trade-marks,  patents,  and  copyrights, 
but,  of  course,  each  is  entirely  distinct  from  the  other.  Trade- 
marks, unlike  patents  and  copyrights,  are  not  limited  in  their 
duration,  but,  once  acquired,  continue  to  be  the  property  of 
their  originators  as  slong  as  they  may  choose  to  use  them. 

The  law  requires  that  a  trade-mark  shall  be  something  new; 
that  is,  the  mark,  design,  or  device  of  the  trade-mark  must  not 
have  been  in  common  use  to  designate  articles  of  a  similar 
nature.     A   trade-mark   must   also   be   exclusive;   that   is,    it 


346        ADVERTISING  AS  A  BUSINESS  FORCE 

cannot  be  used  by  two  or  more  persons  or  corporations  at 
the  same  time. 

The  trade-mark  must  be  attached  to  the  article  in  some  way. 
It  may  be  printed,  stamped,  or  pasted  on  the  article,  or  its 
wrapper,  case,  bottle,  or  cover.  It  may  be  on  a  tag,  a  label 
or  even  on  a  stick  on  which  the  goods  are  rolled,  but  it  must 
accompany  the  article  in  some  way  when  sold.  No  amount 
of  advertising  a  trade-mark  will  suffice  to  protect  the  owner, 
unless  the  purchaser  finds  the  mark  actually  attached  to  the 
article. 

The  main  difficulty  in  picking  out  a  good  trade-mark  lies 
in  the  fact  that  it  cannot  consist  alone  of  words  which  are 
purely  descriptive  of  the  article.  The  reason  for  this  is  that 
others  who  have  a  right  to  sell  the  same  article  have  also  the 
right  to  describe  it  in  the  same  way.  This  rule  is  strictly 
adhered  to  by  the  courts,  more  strictly  in  many  cases  than 
common  sense  warrants. 

For  instance,  it  would  hardly  seem  that  the  person  who 
adopted  this  jaw-breaking  title:  " Ammoniated  Bone  Svper- 
phosphate  of  Lime"  for  a  fertilizer  would  either  rob  his  neigh- 
bors of  a  phrase  they  might  wish  to  use,  or  sell  enough  of  the 
stuff  to  litigate  about.  But  it  is  a  fact  that  such  a  trade- 
mark was  held  invalid  because  it  presumably  only  described 
the  fertilizer.  Even  the  refined  word  "Desiccated,"  when 
applied  to  the  sacred  New  England  codfish,  will  not  do  alone 
as  a  trade-mark,  since  a  good  dictionary  shows  it  to  be  descrip- 
tive of  a  process  which  any  one  else  might  adopt. 

The  courts  go  so  far  as  to  hold  that  words  borrowed  from 
foreign  languages  will  not  do  as  trade-marks  if,  when  trans- 
lated, they  merely  describe  the  article.  One  would  certainly 
think  that  the  original  introducer  of  "Parcheesi"  had  hit 
upon  a  capital  trade-mark  but,  since  the  word  is  Hindustanee 
for  a  game  in  India,  and  since  others  have  the  right  to  make 
and  sell  the  same  game  under  its  real  name,  this  trade-mark 
has  been  held  invalid. 

Some  of  these  cases  are  very  close  and  depend  largely  upon 
the  "  personal  equation  "  seated  upon  the  bench.  Doctor  Dadir- 
rian,  the  originator  of  "Matzoon,"  which  is  the  Armenian  name 
for  buttermilk  fermented  by  a  special  process,  lost  his  case 
against  an  imitator  in  the  Federal  courts  in  New  York  City 
on  the  ground  that  the  word,  translated,  was  merely  descriptive, 
while  in  the  New  York  State  Courts,  sitting  on  the  other  side 


TRADE-MARK  PROBLEMS  347 

of  City  Hall  Park  from  the  federal  court,  it  was  held  that 
" Matzoon"  was  a  perfectly  valid  trade-mark. 

Geographical  names,  too,  are  not  advisable  because  those 
who  manufacture  in  the  same  place  may  use  the  same  name. 
For  this  reason  the  manufacturer  of  "Chicago  Waists"  was 
held  to  have  no  trade-mark  in  this  name  as  against  another 
manufacturer  of  waists  in  Chicago. 

Another  sort  of  trade-mark  which  is  not  always  entirely 
satisfactory  is  one  which  depends  upon  a  proper  name.  Any 
other  person  with  the  same  name  may  decide  to  enter  the  busi- 
ness of  making  and  selling  a  similar  article  under  the  same 
name.  If  a  proper  name  does  appear  in  the  trade-mark, 
there  should  be  additional  words,  designs,  or  figures  which 
another  person  will  not  be  allowed  to  imitate. 

An  important  requirement  of  a  trade-mark  is  that  it  shall 
be  truthful.  No  court  will  protect  from  others  a  man  who 
is  himself  engaged  in  deceiving  the  public.  On  this  ground 
many  trade-marks  of  "patent"  medicines  have  been  held 
invalid  because  of  the  miracles  enumerated  on  the  label  or 
wrapper.  Other  trade-marks  have  failed  to  get  protection 
because  they  state  or  imply  that  the  article  is  manufactured 
in  some  place  or  country  other  than  the  real  place  of  manu- 
facture. All  these  "Made  in  Germany"  and  "Bottled  in 
England"  additions  to  trade-marks  render  the  whole  invalid 
if  the  statement  is  not  substantially  true. 

Other  trade-marks  are  worthless  because  they  state  that  the 
article  is  patented,  when  it  has  never  been  patented  or  when 
the  patent  has  expired.  The  word  "patented,"  however,  if 
the  dates  of  the  patent  are  also  given,  never  invalidates  a 
trade-mark  because  every  one  is  supposed  to  know  that  a 
patent  expires  in  seventeen  years. 

A  fanciful  name  furnishes  the  best  basis  for  a  trade- 
mark as  it  does  not  serve  simply  to  describe  the  article,  as: 

Some      "  Uneeda"  Wiscvdt,  ''' Eureka"  Mowers,  " Apollinaris" 

Good      Water,  " Moxie"  Nerve  Tonic,  " Queen  Quality"  Shoes, 

Trade-     "Royal"  Baking  Powder,  "King  Arthur"  Flour,  "Old 

marks  Crow"  Whiskey,  " Sealpacker chief "  Handkerchiefs, 
"Omega"  Oil.  "Coal  Oil  Johnny's  Petroleum  Soap"  is  also  a 
valid,  if  not  a  delicate  trade-mark. 

There  is  comparatively  little  actual  counterfeiting  of  trade- 
marks; that  is,  the  use  of  labels,  marks,  and  names  precisely 
similar  to  the  original.     This  is  because  imitators  in  general 


348        ADVERTISING  AS  A  BUSINESS  FORCE 

have  a  notion  that  such  a  practice  brings  them  nearer  to  a 
criminal  prosecution  than  the  safer  "accidental"  sort  of 
imitation.  Also,  for  the  same  reason,  infringement  by  the 
use  of  original  trade-marked  packages,  cases,  or  bottles  for 
substituted  goods  is  rare. 

The  favorite  method  consists  of  adopting  a  trade-mark 
so   similar    in   appearance   to   one    which   has    been 

Which  thoroughly  advertised  and  is  "taking  well"  with 
Imitation?  ^^^  public,  as  to  deceive  an  unsuspecting  purchaser, 
and  yet  show  differences  enough,  upon  close  in- 
spection, "to  argue  about  in  court"  as  one  judge  has  put  it. 

Judge  Lacombe  of  the  United  States  Circuit  Court  in  New 
York,  who  has  done  as  much,  probably,  as  any  other  judge 
in  the  country  to  enforce  the  law  against  this  sort  of  business 
piracy,  has  summed  up  the  whole  situation  in  an  interesting 
opinion  in  the  Uneeda  Biscuit  case  which  is  worth  reading: 

"Defendants  present  the  usual  voluminous  bundle  of  affi- 
davits by  persons  in  the  trade  to  the  effect  that  in  their  opinion 
no  one  is  likely  to  mistake  defendant's  biscuits  for  complain- 
ant's. As  has  been  often  pointed  out  before,  it  makes  no 
difference  that  dealers  in  the  article  are  not  deceived.  No 
one  expects  that  they  will  be.  It  is  the  probable  experience 
of  the  consumer  that  the  court  considers.  Here,  too,  we  have 
the  manufacturer  of  the  article  complained  of,  who  explains, 
as  usual  that,  in  adopting  a  trade-mark  by  which  to  identify 
his  own  product,  he  has  been  most  'careful  not  to  trespass 
on  any  rights  of  complainant,  and  that,  after  considerable 
thought,  he  selected  a  name  which  should  make  the  difference 
between  his  goods  and  complainant's  distinct  and  plain,  so 
that  there  could  be  no  possibility  of  mistake.' 

"It  is  a  curious  fact  that  many  manufacturers  of  proprietary 
articles,  when  confronted  with  some  well-advertised  trade- 
mark or  mark  of  a  rival  manufacturer,  seem  to  find  their  inven- 
tive facilities  so  singularly  irresponsive  to  their  efforts  to 
differentiate.  Thus,  in  one  case,  the  words  'Cottoleo'  and 
'Mongolia'  seemed  to  another  defendant  entirely  unlike 
'Magnolia.*  The  manufacturer  of  the  article  which  defendants 
in  the  case  at  bar  are  selling  seems  to  have  no  better  luck, 
for,  with  the  word  'Uneeda'  before  him,  his  device  to  avoid 
confusion  was  the  adoption  of  the  word  'Iivanta.' 

"There  are,  as  also  is  usual,  a  number  of  minor  differences 
between  the  forms  and  the  dress  of  the  two  packages,  but  no 


TRADE-MARK  PROBLEMS  349 

one  can  look  at  both  packages  without  perceiving  that  there 
are  strong  resemblances,  which  could  easily  have  been  avoided 
had  there  been  an  honest  effort  to  give  defendant's  goods  a 
distinctive  dress.  Both  name  and  dress  are  clearly  calculated 
to  mislead,  and  the  statements  that  both  were  adopted  with  an 
eye  to  differentiation,  strain  the  credulity  of  the  court  beyond 
the  breaking  point." 

The  law  books  are  full  of  other  cases  of  infringement,  many 
of  them  much  more  flagrant  than  the  "Uneeda"  case,  but  all 
very  similar  in  principle. 

gg^g         A  less  well-known  case  of  infringement  was  that 

Famous    of  "  Limetta,"  so  called,  a  preparation  of  lime  juice 
Infringe-  which  was  protected  by  injunction  from  infringement 
ments    ^y  qj^  article  trade-marked  *'Limette." 

Sometimes  imitators  conceive  the  bright  but  illegal  idea 
of  adopting  a  name  having  exactly  the  same  sound  but  spelled 
differently.  For  instance,  the  manufacturer  of  ''Yusea"  gas 
mantles  discovered  a  competitor  selling  under  the  name  of 
"  (7.  C.  A.''  gas  mantles  and  soon  ruined  the  latter 's  business 
by  an  injunction. 

Nor  is  it  necessary  that  all  the  words  of  a  trade-mark  be 
imitated  in  order  to  obtain  an  injunction.  It  may  be  enough 
if  the  same  sort  of  idea  is  suggested  by  the  imitation,  so  that 
a  tailoring  firm  doing  business  as  the  ''Six  Little  Tailors" 
was  protected  by  the  courts  against  the  "Six  Big  Taylors." 
Nobody  seems  yet  to  have  chosen  the  title  "Six  Silent  Barbers." 
Perhaps  it  would  be  invalid  as  a  misrepresentation  in  itself. 

The  following  imitations  were  condemned  without  hesitation : 
Cascarets  Castorets 

Apollinaris  Appollinis 

Honeymoon  Honeycomb 

Moxie  Noxie 

Serosis  Sartoris 

On  the  other  hand,  it  is  no  infringement  to  employ  a  trade- 
mark similar  to  one  in  use  upon  an  article  entirely  different 
and  used  for  different  purposes.  In  such  cases  the  public 
cannot  be  misled.  So  the  proprietor  of  "Rough  on  Rats," 
which  he  claimed  would  also  exterminate  other  vermin  than 
the  name  implies,  lost  a  suit  against  the  manufacturer  of 
"Rough  on  Skeeters"  which  was  not  claimed  to  be  fatal  to 
rats  or  other  vermin  in  general. 

Congress  has  passed  several  acts  and  amendments  providing 


350        ADVERTISING  AS  A  BUSINESS  FORCE 

for  the  registration  of  trade-marks,  but  since  the  Federal 
Constitution  gives  no  express  power  of  legislation  upon  this 
subject,  and  since  the  overworked  "commerce"  clause  of  the 
Constitution  can  hardly  be  stretched  to  such  an  extent,  lawyers 
in  general  and  several  judges  have  expressed  doubts  as  to  the 
validity  of  even  the  present  act.  The  earlier  provisions  were  all 
declared  unconstitutional  by  the  United  States  Supreme  Court. 

This  question  fortunately  is  not  a  matter  of  life  and  death 
for  the  business  man,  because  substantially  the  same  protection, 
although  perhaps  less  conveniently,  can  be  obtained  in  the 
state  courts  under  the  state  laws  now  in  force,  in  case  the 
Federal  Registration  Act  should  be  declared  void. 

In  many  states  there  are  statutes  protecting  trade-marks, 
some  of  them  providing  for  criminal  prosecution  in  addition  to 
the  unusual  civil  remedies,  but  entirely  apart  from  all  statutes, 
the  courts  give  protection  as  a  matter  of  necessity. 

All  of  which  emphasizes  the  force  of  the  advice:  "Get  a 
good  trade-mark,  get  it  first,  advertise  it,  and  hold  on  to  it." 

The  complications  arising  in  the  registration  of  the  trade- 
mark are  the  beginning  of  the  trade-mark  exploiter's  troubles. 
jii        The  interpretation  of  the  Federal  Trade-mark  Law 
TronUes  by    the   Patent   Office    Bureau    having   trade-mark 
of  Kegis  ry  pggistration  in  charge  keeps  applicants  for  registry 
very  anxious  and   very   busy  whenever  they  stray   far  from 
certain  very  broad   principles.     Waldon  Fawcett,   under   the 
title  "Trade-marks  That  Have  Been  Refused   Registration," 
describes  in  two  articles  a  number  of  failures  to  comply  with 
the  Bureau's  ideas  of  the  meaning  of  the  law.     Among  these 
were  the  following: 

*Recent    statistics    of    the    business  of  the  United   States 

rp.        Patent  Office  show  a  rather  marked  increase  in  the 

Number    number  of  applications  for  the  registration  of  trade- 

of  New    marks,  and  the  officials  of  the  Trade-mark  Division 

Trade-    gee  a  direct  connection  between  this   circumstance 

"*"         and   a   number   of   legal  controversies  and   business 

transactions  which  have,  within  the  past  few  months,  com- 

*Printers'  Ink,  May  2.  1912. 


TRADE-MARK  PROBLEMS  351 

bined  to  emphasize,  as  has  never  been  done  before,  the  value 
of  widely  advertised  trade-marks. 

Perhaps  the  most  potent  argument  for  this  form  of  publicity 
was  a  statement  in  a  petition  submitted  to  the  United  State 
Circuit  Court  in  connection  with  the  proposed  plan  of  dissolu- 
tion of  the  American  Tobacco  Company.  This  was  to  the 
effect  that  the  trade-marks  controlled  by  the  American  Tobacco 
Company  have  a  value  in  excess  of  $45,000,000  out  of  total 
assets  of  $227,000,000. 

Another  statement  that  has  helped  to  stimulate  popular 
appreciation  was  made  by  President  Green  of  the  National 
Biscuit  Company  in  a  public  address  at  Kansas  City.  He 
estimated  that  the  trade-mark  "Uneeda"  —  which  has  been 
flattered  by  more  than  400  imitations  and  infringements  — 
is  worth  to  his  company  more  than  $1,000,000  a  letter,  or 
in  excess  of  $6,000,000  in  all.  Of  similar  purport  was  the 
recent  declaration  of  the  Gorham  Manufacturing  Company, 
in  a  legal  suit  for  the  infringement  of  their  Lion  and  Anchor 
trade-mark,  that  this  mark  was  worth  between  $1,000,000  and 
$2,000,000.  The  valuation  of  $5,000,000  placed  by  an  officer 
of  the  Coca  Cola  Company  upon  his  firm's  trade-mark  was  in 
the  same  line  of  argument  as  have  been  the  admissions  of  the 
impossibility  of  accurately  appraising  the  monetary  value 
of  such  trade-marks  as  Kodak  and  the  familiar  dog  —  "Llis 
Master's  Voice"  —  of  the  Victor  Talking  Machine  Company. 

Whereas,  more  general  knowledge  of  the  rich  rewards  that 
can  follow  the  successful  exploitation  of  a  trade-mark  has 
served  to  quicken  the  trade-mark  quest  to  an  average  of  nearly 
600  applications  per  month  it  has  also  resulted  in  a  slight 
proportionate  increase  in  the  number  of  rejections,  such  has 
been  the  eagerness  to  secure  strikingly  distinctive  trade-marks. 
The  officials  of  the  Trade-mark  Division  estimate  that  ulti- 
mately 80  to  85  per  cent,  of  all  the  applications  for  trade- 
marks meet  with  success,  but  current  statistics  do  not  indicate 
any  such  proportion  of  acceptances,  largely  because  many 
applicants  for  trade-marks  consider  it  to  their  advantage  to 
have  their  cases  drag  along  after  due  application  has  been 
made.  Thus  the  registrations  of  trade-marks  during  the  year 
1911  aggregated  slightly  less  than  7,000,  but  there  are  more 
than  12,000  cases  pending,  some  of  which  have  had  this  status 
ever  since  the  year  1905,  when  the  present  trade-mark  law 
went  into  effect. 


352        ADVERTISING  AS  A  BUSINESS  FORCE 

However,  the  number  of  rejections  by  Uncle  Sam's  trade- 
mark examiners  is  really  surprisingly  small  considering  the 
number  of  pitfalls  to  be  avoided  by  applicants  for  what  have 
been  dubbed  "commercial  signatures."  The  greatest  number 
of  rejections  arising  from  any  one  cause  are  due  to  attempts 
to  secure  registration  for  trade-marks  that  come  under  the 
ban  against  descriptive  words  or  terms.  It  is  in  this  sphere 
too  that  there  are  to  be  found  some  of  the  finest  points  con- 
tained in  the  decisions  of  the  Federal  examiners,  for  it  is  often 
like  splitting  hairs  to  difiPerentiate  between  a  descriptive  word 
and  a  suggestive  word.  And  a  slightly  suggestive  word  or 
term,  as,  for  instance,  "Uneeda,"  is  considered  the  ideal  trade- 
mark. 

The  delicate  distinctions  made  are  illustrated  by  the  rejec- 
tion of  the  word  "Rubberoid,"  which  was  held  to  be  more 

clearly  descriptive  than  certain  other  words  of  the 

Del'^^t     ^^™^  class  which  might  appear  to  the  lay  mind  as  on 

Distinctions  ^  P^^  w  ith  this  one.     In  line  with  this  same  policy 

was  the  rejection  of  an  application  for  "Nexttobeer" 
as  a  trade-mark  for  a  non-alcoholic  drink.  Nor  can  an  appli- 
cant hope  to  dodge  the  issue  by  changing  the  spelling  of  descrip- 
tive terms.  As  evidence  witness  the  rejection  of  "Kantleek," 
which  was  held  to  be  a  mere  misspelling  of  ordinary  descriptive 
words,  although  the  attorney  for  the  applicant  eloquently 
pleaded  that  the  name  was  a  combination  of  the  German 
words  "Kant"  and  "leek,"  which  have  no  such  significance 
as  are  ascribed  to  them  in  English. 

And  while  on  the  subject  of  foreign  words  it  may  be  whispered 
that  it  is  futile  for  any  manufacturer  to  hope  to  secure  trade- 
mark registration  for  a  descriptive  word  originating  in  any 
foreign  language  provided  that  w^ord  is  to  be  found  in  any  of 
the  foreign  dictionaries  consulted  by  the  trade-mark  examiners 
in  making  their  decisions.  It  matters  not  at  all,  either,  that  the 
word  may  be  unknown  and  unused  in  the  United  States.     .     . 

Although  the  examiners  in  the  Trade-mark  Division  cannot 
give  advice,  any  perusal  of  their  decisions  and  expressions  on 

this  subject  of  avoiding  the  descriptive  in  terms  to 
Fanciful  |-,g  trade-marked  will  bring  conviction  that  the  best 
Preferred  P^^^  is  to  seek  the  fanciful.     A  combination  of  the 

initials  of  members  of  firm,  as  in  the  case  of  the  Kalem 
Company,  manufacturers  of  motion  pictures,  is  a  favorite 
expedient,  and  Greek  letters  and  words  have  been  made  to 


TRADE-MARK  PROBLEMS  353 

serve  the  same  purpose  satisfactorily.  The  man  who  is 
wedded  to  the  idea  of  a  descriptive  word  for  a  trade-mark, 
and  who  desires  to  get  just  as  close  as  possible  to  this  ideal 
and  yet  win  registration,  will  have  his  best  chance  if  he  will 
slightly  change  the  form  of  the  desired  descriptive  word, 
perhaps  adding  an  "a"  or  an  "o,"  and  giving  the  term  a  fanciful 
twist  that  makes  it  possible  to  interpret  it  as  a  suggestive 
rather  than  a  descriptive  term.  Sapolio  is  a  notable  example 
and  dozens  of  others  will  occur  to  every  reader. 

JNIany  persons  have  been  puzzled  by  the  existence  of  trade- 
mark registration  upon  words  that  seem  to  be  clearly  descriptive. 
The  explanation  is  that  these  words  were  not  descriptive 
when  the  trade-mark  certificate  was  first  issued,  but  have 
since  been  made  so  —  thanks,  usually,  to  the  energetic  promo- 
tion and  publicity  of  the  owner  of  the  trade-mark.  There 
are  a  number  of  trade-mark  words  which  might  be  cited  in  illustra- 
tion of  this  situation  —  for  instance,  Kodak  and  Castoria  —  but 
the  best  example  is  Vaseline.  As  a  matter  of  fact  the  average 
"man  on  the  street"  never  suspects  that  Vaseline  is  a  pro- 
prietary name.  It  had  no  special  significance  when  the  trade- 
mark was  issued,  but  it  has  gradually  become  descriptive  in 
the  highest  degree;  has  found  its  way  into  the  dictionaries; 
and  has  acquired  increased  value  as  a  trade-mark  in  conse- 
quence. The  possibility  of  such  a  happy  sequel  is  always  an 
argument  in  favor  of  the  "coined  word"  as  a  trade-mark. 

Next  to  the  prohibition  against  the  descriptive  the  stumbling 
block  that  probably  begets  the  greatest  number  of  complica- 
tions is  the  veto  against  geographical  names  as  trade-marks. 
In  certain  lines  of  business,  as,  for  example,  fruit-raising,  food- 
manufacturing,  canning,  etc.,  there  seems  to  be  an 
„    ^^^  . .  almost  universal  ambition  to  secure  trade-marks  that 

Ncune^  savor  of  the  geographical.  To  what  lengths  such 
restriction  is  carried  is  evidenced  by  the  rejection 
of  a  candy  manufacturer's  application  for  the  right  to  use 
the  word  "Clermont."  The  refusal  was  based  on  the  cir- 
cumstance that  there  is  a  Clermont  County  in  one  of  our 
states,  although  it  is  not  located  anywhere  near  the  seat  of  the 
industry  concerned  and  there  was  seemingly  no  connection 
between  the  two.  A  hard  fight  was  made  for  the  acceptance 
of  the  word  "Tabasco,"  but  it  was  refused  because  it  is  the 
name  of  a  state  in  Mexico. 

A  certain  ingenuity  is  required,   of  course,   to  coin  words 


354        ADVERTISING  AS  A  BUSINESS  FORCE 

or  to  infuse  the  element  of  the  fanciful  in  a  term  in  order  to 
secure  trade-mark  registration,  but  equal  originality  is  neces- 
sary in  order  to  secure  registration  for  the  name  of  a  firm  or 
corporation  or  individual.  The  law  prohibits  the  registration 
of  any  such  name  unless  it  be  presented  in  a  distinctive  manner, 
and  to  secure  such  distinctive  individuality  combined  with  the 
desirable  artistic  qualifications  is  often  no  mean  responsibility. 
It  is  this  class  of  trade-mark  designs,  too,  which  most  sorely 
puzzle  the  examiners  who  are  called  upon  to  decide  what  shall 
pass  muster.  They  have,  however,  adopted  it  as  a  general 
basic  principle  that  to  secure  acceptance  as  a  trade-mark  the 
name  of  a  corporation  or  individual  must  be  so  presented 
that  the  mind  of  the  average  citizen  seeing  it  or  purchasing 
the  article  to  which  it  is  attached  will  be  impressed  with  the 
design  or  display  of  the  name  rather  than  with  the  name  itself. 
This  means,  of  course,  that  unusual  lettering,  unique  color 
combinations,  etc.,  are  conducive  to  acceptance. 

This  prohibition  against  the  names  of  corporations  unless 
presented  in  distinctive  manner  was  responsible  up  to  a  few 

months    ago    for    some    odd    whims    of    fate.      For 

Autographs  instance,  the  company  publishing  Success  Magazine 

Pass     ^^^  denied  the  right  to  trade-mark  its  name,  although 

any  person  else  in  the  country  might  have  secured 
trade-mark  protection  for  the  word  "Success."  But  "Success" 
as  used  in  connection  with  the  magazine  was  held  not  to 
be  presented  in  distinctive  manner.  The  same  kink  in 
the  law  operated  against  companies  whose  titles  included  the 
words  "Champion,"  "Acme,"  etc.  However,  after  some  five 
hundred  trade-marks  had  been  barred  on  this  score  there  was 
enacted  last  year  a  remedial  amendment  to  the  law  which 
permits  the  registration  of  the  name  of  an  applicant  if  other- 
wise registrable.  It  may  be  noted  in  this  connection  that 
the  Trade-mark  Division  has  never  questioned  but  that 
an  autograph  signature  is  to  be  regarded  as  a  name  dis- 
tinctively displayed.  Monograms  are  also  accepted  almost 
invariably,  although  the  experts  at  Washington  consider  a 
monogram  the  least  satisfactory  form  of  trade-mark  owing 
to  the  fact  that  it  may  be  wrongly  interpreted  and  on  the 
general  principle  that  all  monograms  look  alike. 

Many  applicants  fail  in  the  quest  for  trade-mark  registration 
because  they  have  not  been  informed  that  there  is  no  chance  to 
secure  acceptance  for  any  design  that  embodies  wholly  or  in 


TRADE-MARK  PROBLEMS  355 

part  the  flag  of  the  United  States  or  any  pubhc  insignia,  state 
seals,  coats  of  arms,  the  emblems  of  fraternal  organizations, 
etc.  The  officials  have  always  refused  to  register  the  letters 
"U.  S."  The  Red  Cross  can  be  registered  as  a  trade-mark 
only  in  case  it  can  be  shown  that  it  was  in  such  use  by  the 
applicant  prior  to  January  5,  1905.  However,  in  accordance 
with  a  rather  unusual  line  of  reasoning  the  officials  will  accept 
the  white  cross  and  other  designs  that  might  seem  to  have 
been  inspired  by  the  Red  Cross.  The  contention  of  the  Govern- 
ment is,  however,  that  the  Red  Cross  is  so  well  known  that 
it  would  be  virtually  impossible  for  any  confusion  to  result 
in  consequence  of  the  appearance  of  such  designs  as  the  white 
cross  and  the  blue  cross. 

The   fact  that   the   Trade-mark    Division  will  register  the 

name  of  any  celebrity  who  is  dead,  but  will  not  always  register 

the  name  of  a  living  celebrity  sometimes  results  in 

Celebnties  }jygiy  work  on  the   part  of   an    applicant  following 

^Dead""  ^^^^  death  of  a  prominent  man.  A  case  in  point 
was  that  of  the  King  Edward  cigar,  for  which  the 
manufacturer  sought  trade-mark  protection  immediately  upon 
the  death  of  the  late  monarch.  In  the  case  of  a  scramble  to 
get  applications  in  following  the  death  of  a  celebrity  the  race 
would  not,  however,  necessarily  go  to  the  swift.  Under  such 
circumstances  the  award  would  be  made  in  accordance  with 
the  evidence  as  to  which  of  the  applicants  was  the  first  to 
adopt  and  use  the  name. 

The  names  of  living  celebrities  may  be  registered  if  written 
permission  from  the  person  concerned  accompanies  the  apph- 
cation.  This  explains  the  use  of  the  names  of  popular  actors, 
etc.,  in  connection  with  trade-mark  brands  of  cigars.  More 
often  than  not,  however,  permission  is  refused.  Admiral 
Dewey  is  a  name  that  has  probably  been  more  frequently 
rejected  than  that  of  any  other  living  American.  The  Trade- 
mark Division  has  a  rule  that  it  will  not  register  the  name  of 
any  President  of  the  United  States,  no  matter  whether  living 
or  deceased,  it  being  held  that  this  is  against  public  policy 
and  not  compatible  with  the  respect  due  the  office  of  Chief 
Magistrate.  Here  again,  however,  there  is  a  loophole.  Dur- 
ing the  life  of  a  President  or  ex-President,  registration  will  be 
granted  upon  authorization  by  the  dignitary  concerned. 
Thus,  President  Cleveland  authorized  the  use  of  his  name  as 
the  trade-mark  of  a  cigar,  and  President  Taft  has  given  his 


356        ADVERTISING  AS  A  BUSINESS  FORCE 

consent  for  the  use  of  his  name  as  the  trade-mark  of  the  product 
of  a  manufacturer  of  artificial  flowers. 

One  of  the  tendencies  in  trade-mark  activities  which  has 
impressed  the  officials  at  Washington  as  growing  more  marked 
as  time  goes  on  is  the  strong  predilection  of  manufacturers  in 
any  given  line  for  trade-marks  of  the  class  which  have  become 
popular  through  custom  in  that  particular  field.  In  this 
matter  precedent  seems  to  be  paramount  and  in  a  field  where 
fanciful  terms  are  the  favored  trade-marks  it  is  almost  unlieard 
of  for  a  firm  to  adopt  a  proper  name  or  a  picture.  To  illustrate 
how  fashion  dictates  the  form  of  trade-marks  it  may  be  men- 
tioned that  in  the  piano  industry  names  are  the  invariable  trade- 
marks; in  the  canned  goods  trade  pictures  are  preferred;  in 
the  electrical  field  coined  words  have  tlie  call,  and  in  the  coal 
trade  there  is  a  penchant  for  designs  such  as  the  star  and  the 
diamond.  So  it  is  through  the  entire  list  of  business  lines 
and  it  is  the  exceptional  firm  or  individual  that  is  willing  to 
turn  from  the  beaten  path  in  this  respect. 

.  .  .  .  *To  get  the  proper  perspective,  too,  on  some  of 
the  inconsistencies  that  are  ofttimes  cited  it  is  necessary  to 
go  back  a  bit  in  trade-mark  history.  The  United  States 
statutes  covering  trade-marks  have  been  revised  and  amended 
from  time  to  time,  and  the  practice  of  the  Patent  Office  has 
likewise  fluctuated  —  in  some  instances  in  direct  response 
to  changes  in  the  laws.  Generally  speaking  most  of  the  trade- 
marks, the  admission  of  which  has  been  criticised,  were  regis- 
tered years  ago  when  the  practice  of  the  Trade-mark  Division 
was  by  no  means  so  rigid  as  it  is  to-day. 

During  the  interim  from  1890  to  1900  trade-mark  practice 
was  very  loose.  From  1901  to  1904  it  was  characterized  by 
Changes  in  ^  vacillating  policy.  In  1905  Congress  passed  the 
ike  Policy    new  trade-mark  law  which  was  intended  to  be  very 

of  the  liberal  to  the  manufacturers  and  other  users  of 
I^gistry  trade-marks.  Accepting  the  spirit  of  the  framers 
of  the  new  law  the  officials  of  the  Trade-mark 
Division  were  decidedly  lenient.  In  short  they,  in  effect, 
interpreted  the  new  law  as  demanding  the  registration  of  every- 
thing not  merely  descriptive.  If  a  trade-mark  presented  the 
descriptive    element    combined    with    other    features    it    was 

"Printers   Ink,  July  18.  1912,  p.  112. 


TRADE-MARK   PROBLEMS  357 

accepted  for  registration.  This  policy  prevailed  for  a  couple 
of  years  or  until,  in  the  natural  course  of  events,  the  higher 
courts  of  the  nation  began  to  hand  down  decisions  in  trade- 
mark cases  under  the  new  law.  Then  it  was  discovered  that 
the  Patent  Office  had  been  too  lenient.  As  the  courts  handed 
down  one  decision  after  another  to  the  same  purport  there 
was  a  continual  stiffening  of  trade-mark  practice  throughout 
the  years  1907,  1908,  and  1909,  until  now  practice  is  probably 
more  exacting  and  more  inflexible  than  at  any  time  in  the 
history  of  trade-marks. 

With  this  the  situation  it  will  be  appreciated  that  the  interest 
of  the  present-day  manufacturer  is  not  so  much  in  the  trade- 
marks that  have  come  down  to  us  as  evidence  of  the  incon- 
sistencies of  former  practice  as  in  the  trade-marks  of  uncertain 
eligibility  which  serves  to  illustrate  through  their  fate  the 
latter-day  policy  of  the  officials.  Some  of  the  trade-marks, 
for  instance,  which  have  been  rejected  as  descriptive  are 
calculated  to  cause  many  a  layman  to  "wonder  why."  In 
this  category,  maybe,  is  "Circular  Loom"  which  was  unsuc- 
cessful. Likewise  "  Naptha"  which  was  held  to  be  descriptive 
of  the  Fels  product  and  "Rust.'*  Never,"  which  was  disallowed 
for  use  on  hooks  and  eyes. 

Some  of  the  confusion  caused  by  lack  of  regularity  in  trade- 
marks does  not  differentiate  between  registered  and  unregis- 
tered trade-marks.  Some  manufacturers  never  make  any 
attempt  to  register  at  Washington  their  common-law  trade- 
marks, and  others,  relying  on  such  protection  as  the  common 
law  may  give,  have  continued  to  use  trade-marks  which  have 
been  refused  registration  at  Washington.  But  these  facts 
do  not  appear  on  the  surface,  because  most  manufacturers, 
even  though  they  may  have  secured  registration,  fail  to  add 
the  all-important  word  "Registered"  to  the  trade-mark  inscrip- 
tion on  their  goods,  and  so  many  persons  go  on  marveling  that 
the  Patent  Office  could  have  accepted  trade-marks  which, 
if  the  truth  were  known,  have  never  been  so  accepted. 

Another  source  of  some  confusion,  especially  to  newcomers  in 
the  field,  is  found  in  the  "exceptions"  to  established  trade-mark 
rules,  for  in  this  field,  as  in  all  others,  there  are  some  exceptions. 
The  most  startling  exceptions  are  those  made  possible  by 
what  is  known  in  trade-mark  practice  as  the  "ten-year  clause." 
This  was  a  clause  in  the  trade-mark  law,  passed  in  1905,  which 
provided  for  the  jTegi.stration  without  question  of  any  trade- 


358        ADVERTISING  AS  A  BUSINESS  FORCE 

mark  which  for  ten  years  or  more,  prior  to  1905,  hhd  been  in 
actual  and  exclusive  use  by  the  applicant  or  his  predecessors. 
The  effect  of  this  clause  was,  of  course,  to  let  down  the  bars 
for  all  sorts  of  descriptive  and  otherwise  prohibited  trade- 
marks provided  they  had  the  merit  of  age  and  the  law,  in 
effect,  gave  a  tremendous  advantage  to  old-established  manu- 
facturers who  had  the  wisdom  to  adopt  a  distinctive  trade- 
mark at  an  early  stage.  All  the  same  the  trade-marks  that 
secured  registration  under  this  exemption  are  bound  to  prove 
something  of  a  thorn  in  the  side  of  the  late  comer  in  the  manu- 
facturing field  who  is  allowed  no  such  latitude  in  his  choice 
of  a  trade-mark.  As  an  example  of  the  trade-marks  that  were 
made  eligible  under  the  "ten-year  clause"  but  would  not  be 
eligible  were  they  originated  to-day  there  may  be  cited  the 
famous  "1847  Rogers  Bros."  silverware  mark;  the  Elgin  and 
Waltham  Watches  and  the  Kalamazoo  Stove  (all,  it  will  be 
observed,  geographical  terms) ;  the  Red  Cross  shoes  and  drug- 
gists' specialties;  and  a  host  of  names  of  Indian  tribes,  applied 
to  products  of  various  kinds. 

TRADE-MARK   SELECTION 

With  these  points  in  mind  as  to  the  purpose  of  the  trade- 
mark and  a  few  of  the  legal  aspects  which  must  be  considered, 
we  begin  to  appreciate  something  of  the  difficulties  which  con- 
front an  actual  or  prospective  advertiser  who  wishes  to  select 
and  exploit  a  mark  for  the  establishment  of  his  commercial 
identity. 

Not  only  is  it  necessary  to  keep  in  mind  the  purpose  for 
which  the  mark  is  selected  and  the  legal  restrictions  upon  selec- 
tion, but  there  are  many  other  factors  which  enter 
Fadmsin  and  serve  to  make  trade-mark  selection  extremely 
Trade-mark  difficult.  The  following  cases  of  successful  and  un- 
Selectum  g^^^^^ggf^j  trade-mark  selection,  compiled  under  the 
heading  of  "The  Wise  and  Foolish  in  Advertising  Names," 
was  prepared  by  Jerome  DeWolff,  and  shows  how  extremely 
easy  it  is  to  go  WTong  in  trade-mark  selection,  and  how  many 
elements  enter  to  prevent  the  trade-mark  selector  from  being 
certain  that  he  is  going  right. 


TRADE-MARK  PROBLEMS  359 

*" What's  in  a  name? "asked  the  hard  of  bards. 

It  all  depends.  If  it  is  to  be  an  advertising  name,  its  selec- 
tion is  of  the  utmost  importance.  It  may  be  true  that  "that 
which  we  call  a  rose  by  any  other  name  would  smell  as  sweet." 
But,  at  the  same  time,  that  new  product  of  the  manufacturing 
world  which  is  destined  to  have  large  advertising  appropriations 
expended  upon  it  had  best  not  be  coupled  with  a  name  which 
is,  for  any  reason,  displeasing,  or  inappropriate,  misleading,  or 
not  easily  remembered  or  pronounced.  Otherwise,  it  probably 
may  never  prove  a  "best  seller,"  from  first  to  last,  no  matter 
what  its  financial  backing  or  its  intrinsic  elements  of  superiority. 

Bliss,  Fabyan  &  Co.,  of  Boston,  can  testify  authoritatively 
to  the  selling  power  of  a  good  brand  name  per  se.  Who  doesn't 
remember  the  "seersucker"  gowns  that  our  mothers  and  old- 
time  folk  used  to  wear.f^  It  was  the  popular  fabric  of  Fashion's 
yesterday.  So  popular,  indeed,  did  the  goods  become  that 
everybody  was  wearing  it.  That  settled  "seersucker."  Milady 
straightway  turned  up  her  nose  at  the  suggestion  of  another 
gown  made  of  "seersucker"  when  she  found  her  maid  and 
everybody  else's  maids  were  wearing  gowns  made  of  "seer- 
sucker," too.  So  the  fabric  gradually  fell  into  disrepute  and 
sales  fell  off  tremendously.  For  some  years  now  "seersucker" 
has  had  almost  no  sale  whatever,  and  only  among  the  humbler 
folk. 

When,  lately,  Bliss,  Fabyan  &  Co.  attempted  to  bring  about 
a  revival  of  "seersucker,"  it  found  itself  greatly  handicapped 
by  the  stigma  of  commonness  which  was  still  clinging  to  the 
goods,  even  after  many  intervening  years.  "Seersucker"  cer- 
tainly could  not  be  sold.  Finally  A.  W.  Ellis,  of  the  Ellis 
Agency,  Boston,  suggested  a  complete  change  of  name,  and  the 
exploitation  of  the  fabric  as  if  something  entirely  new.  He 
thought  up  the  name  "Ripplette."  To-day  Bliss,  Fabyan  & 
Co.  are  reputed  to  be  doing  a  monster  business  on  "Ripplette." 

At  a  dinner  of  the  Technical  Publicity  Association  this 
winter,  H.  N.  McKinney,  of  N.  W.  Ayer  &  Son, 

Ease  of    gently   criticised    the   General    Electric    Company's 

dation  selection  of  the  word  "Mazda"  as  its  trade-mark 
and  widely  advertised  name  for  a  lamp  somewhat 
similar  to  the  Tungsten. 

Mr.  McKinney  confessed  that  he  had  never  been  absolutely 


*Printers'  Ink.  July  28,  1910. 


360        ADVERTISING  AS  A  BUSINESS  FORCE 

certain  how  to  pronounce  "Mazda,"  and  that  he  assumed  that 
there  were  others  whose  perspicuity  did  not  exceed  his  and 
who  did  not  know  how  to  pronounce  "Mazda,"  either. 

Mr.  McKinney  also  vouched  for  a  story  about  a  well-to-do 
man  who  one  day  went  to  a  showroom  and  asked  to  be  shown 
a  certain  product,  calling  it  by  its  trade-marked  name  but 
pronouncing  it  wrongly.  So  great  was  his  chagrin,  when  the 
ill-mannered  salesman  took  occasion  to  correct  his  pronuncia- 
tion, that  he  turned  on  his  heel  and  left  the  showroom  in  a 
huff.  He  had  entered  the  place  fully  intending  to  leave  a 
substantial  order  for  some  thousands  of  dollars'  worth  of  the 
goods. 

In  this  direction  lies  one  of  the  greatest  dangers  when  it 
comes  to  selecting  trade-mark  names.  Not  every  customer 
is  going  to  have  his  incorrect  pronunciation  revised  by  an 
ill-mannered  clerk,  to  be  sure,  but,  then,  not  every  prospective 
customer  is  not  going  to  be  so  cocksure  of  himself.  Rather 
than  run  the  risk  of  pronouncing  a  trade-marked  name  improp- 
erly and  be  laughed  at  behind  his  back  by  a  "know-it-all" 
clerk,  even  though  not  openly  corrected,  many  a  customer  will 
much  prefer  to  call  for  some  competitive  brand,  the  name  of  which 
cannot  be  questioned.    Result:   a  lost  sale. 

Consider  "Bon  Ami,"  the  soap  for  scouring.  Two  little 
words  of  three  letters  each,  yet  it  is  pronounced  in  a  score  or 
more  of  different  ways.  The  name  was  selected  some  eighteen 
years  ago  by  a  man  named  Gardiner,  who  was,  at  the  time, 
connected  with  the  J.  T.  Robertson  Company,  a  small  concern 
of  Glastonbury,  Conn.  The  company  already  had  any  number 
of  soaps  known  by  other  names.  The  comparative  importance 
of  the  name  of  a  new  addition  did  not  then  seem  great.  And 
it  wasn't  —  not  then.  A  moment's  thought  suggested  "Bon 
Ami"  and  Mr.  Gardiner  turned  his  mind  to  something  else. 

Of  all  the  large  family  of  Robertson  soap  products,  "Bon 
Ami "  has  survived  and  grown  in  popularity.  But  its  survival  and 
growth  have,  in  no  degree,  been  due  not  to  its  name  but  rather 
to  fortunate  conditions  of  supply  and  demand,  to  good  mer- 
chandising, and,  most  of  all,  to  careful  and  persistent  adver- 
tising. 

W.  H.  Childs,  of  the  Bon  Ami  Company,  now  states  that  he 
would  be  willing  to  give  many  thousands  of  dollars  if  only 
the  name  "Bon  Ami"  could  be  changed  to  any  one  of  a  number 
of  other  names  which  his  experience  has  shown  him  would 


TRADE-MARK  PROBLEMS  361 

be  far  better  without  losing  the  time,  money,  and  effort  which 
has  been  put  into  past  advertising.  "Bon  Ami"  is  objection- 
able, for  one  thing,  because  "the  masses"  do  not  know  enough 
French,  as  a  rule,  to  appreciate  its  meaning  and  hence  its 
appropriateness.  Furthermore,  not  knowing  French,  "the 
masses  "  cannot  be  certain  which  of  the  five  English  sounds  of 
the  letter  "o"  applies,  which  of  the  six  sounds  of  "a,"  and 
which  of  the  three  sounds  of  "i."  It  would  require  a  mathema- 
tician to  figure  out  the  vast  number  of  different  combinations 
which  are  possible.  When  the  words  "Bon  Ami"  are  pro- 
nounced in  a  number  of  different  ways  in  the  company's  own 
offices,  what  can  be  expected  of  the  uninformed  "masses" 
when  they  go  to  their  grocers.'' 

Foreign  words  and  phrases  for  use  as  trade-marks  should  be 
looked  at  askance.  Unless  there  can  be  absolutely  no  question 
but  that  their  meaning  and  pronunciation  will  be  understood, 
they  had  best  be  left  strictly  alone.  There  is  no  telling  how 
much  business  Ed  Pinaud,  for  example,  has  lost  in  America 
simply  because  Americans  have  been  uncertain  about  their 
pronunciation  of  his  name.  And  the  same  general  rule  applies 
to  any  word  or  phrase,  domestic  or  foreign,  which  are  to  be 
used  as  trade-marks.  The  public  doesn't  know  how  to  pro- 
nounce "Cafe  d'Amenonville,"  so  it  talks  about  other  cafes 
with  easier  names.  "Hyomei"  looks  too  queer  for  one  to 
easily  make  a  clear  mental  picture  of  it.  Therefore  it  is  not 
remembered. 

The    advertising   world    has    too   many   excellent  examples 

of  successful  brands  which  have  been  christened  with  coined 

names   to   question    the   growing    practice  of    using 

joined    ^jjem.       The   possibilities   for   originality  in  coined 

Trade-     i^^Di^s  are  great,  and  it  is  the  name  which  is  original 

marks  without  being  impossible  which  the  public  most 
easily  remembers.  Furthermore,  the  coined  name 
may  be  made  highly  descriptive  without  being  tabooed  by  the 
copyright  authorities.  The  advertising  pages  furnish  any 
number  of  examples  of  this  sort  of  thing,  as  "Rubdry  Towels," 
"Keepkool  Underwear,"  "Keen  Kutter  Tools,"  "Slidewell 
Collars,"  "Come-Packt  Furniture,"  etc. 

The  coined  name,  too,  should  be  easy  to  pronounce  and 
easy  to  spell.  It  should  not  be  grotesque  or  in  any  way  dis- 
pleasing. Possibly  the  name  "Mak-Mor  Sales  Company" 
can  be  criticised  on  this  score.     Certainly  the  name  "Vassar" 


362        ADVERTISING  AS  A  BUSINESS  FORCE 

in  men's  underwear  suggests  something  effeminate  which  does 
not  tend  to  induce  sales  with  all  men. 

The  coined  name  should  be  dignified.  "Shave-Foam  Soap," 
"Useeit  Water  Coolers"  and  many  other  names  fail  to  com- 
mend themselves  for  this  reason.  A  name  may  lack  dignity 
and  meaning  simply  because  it  is  too  unusual,  because  it  borders 
upon  the  impossible.  "Javmarmo,"  "Viyella,"  "Oxzyn," 
"latrol,"  "Khedevial,"  etc.,  seem  to  "the  masses"  to  be 
pure,  unadulterated  Choctaw.  And  when  there  is  a  successful 
"Uneeda"  on  the  market,  then  "Uwanta,"  "Takhoma," 
"Tryabita"  and  "Eta"  brands  seem  obvious  imitations  and 
hence  undignified,  too. 

Mr.  Advertiser  should  have  another  weighty  consideration 

uppermost  in  his  mind  when  thousands  of  dollars  are  at  stake. 

He  should  look  out  for  the  long,  ponderous   name. 

Long      "Mennen's    Talc"    is    far    better    than    "Mennen's 

and^hort  ^orated  Talcum  Toilet  Powder,"  for  example.     Or 

Ones      compare  as  to  length  the   name   "Barrington   Hall 

Bakerized  Steel-Cut  Coffee"  with  "Mauna  Coffee." 

It  costs  money  to  buy  space  in  which  to  exploit  a  long  name, 

and,  what  is  quite  as  important,  a  long  name  takes  the  reader's 

time  in  the  reading  of  it.     The  reader's  time  is  a  consideration 

of  the  greatest  importance  when  one  has  an  advertising  message 

to  tell. 

For  this  reason  the  trade-marked  name  "Mumm"  is  an 
excellent  one.  The  same  thing  is  true  of  "Cremo,"  "Calox," 
"Alco,"  "Arab,"  "Cobs,"  "Cyko,"  "Flexo,"  "Guyot," 
"Hind's,"  "Hoff's,"  "Jello,"  "Kodak,"  "Nulife,"  "Omega," 
"Presto,"  "Pyro,"  "Shac,"  "Vinol,"  "Whiz,"  etc.,  each  of 
which  can  be  pronounced  by  anybody  who  can  read  and  is, 
in  addition,  short,  terse,  virile,  dignified,  and  distinctive. 
Compare  with  them  such  long  names  as  "Telekathoras," 
"Mentholatim,"  "Kantwearout,"  "Mississippi  Diarrhoea  Cor- 
dial," "Nine  O'clock  Washing  Powder,"  "Siegert's  Angostura 
Bitters,"  "Brunswick-Balke-Collender,"  "Pozzoni's  Com- 
plexion Powder,"  etc.,  many  of  which  are  difficult  to  pronounce 
to  boot,  and  are  thus  doubly  difficult  to  remember. 

jjgy,  The  task  of  selecting  a  name  for  a  product  may 

"Walk-  seem  easy.  That  is  undoubtedly  why  so  many 
Over"  Was  advertisers   jot    down   the  first   name  which  comes 

Selected  ^^^^  their  heads,  and  let  it  go  at  that.  But  the  wise 
advertiser,   when  it  comes  to  the  selection  of  a   name,  is  in 


TRADEMARK  PROBLEMS  363 

no  haste.  He  is  open  to  suggestions  and  inspirations  from  all 
sources. 

Some  years  ago,  in  1895,  to  be  exact,  George  E.  Keith,  of  the 
shoe  company  bearing  his  name  and  making  the  famous 
"Walk-Over"  shoes,  very  much  wanted  a  new  name  for  a 
new  brand  of  shoes  which  he  proposed  to  advertise  and  push 
extensively.  He  considered  the  situation,  in  all  its  aspects, 
for  many  months.  He  had  held  himself  open  to  suggestions 
from  every  direction,  but  the  name  which  just  suited  was  not 
forthcoming. 

It  was  September.  Interest  in  the  international  yacht  races 
was  running  high  in  America.  The  evening  after  the  final 
contest  Mr.  Keith  and  his  wife  were  seated  in  their  library, 
Mrs.  Keith  was  reading  to  him  the  newspaper  account  of  the 
race.  It  described  the  poor  showing  made  by  Lord  Dunraven's 
Valkyrie  III  against  the  American  boat  Defender.  In  the 
middle  of  the  story  came  the  phrase:  "Amid  great  excitement 
the  American  boat  slipped  away  and  won  the  race  in  a  complete 
walk-over." 

Mr.  Keith  jumped  to  his  feet.  "That's  the  very  name  I 
want  for  my  new  brand  of  shoes.  'Walk-Over,  Walk-Over 
Shoes'  — it's  just  the  thing."  And  "Walk-Over  Shoes"  it 
has  been.  The  name  is  an  excellent  one  and  has  undoubtedly 
aided  materially  in  the  success  which  this  great  brand  of  shoes 
has  since  achieved. 

TRADE-MARK   POLICY 

The  application  of  trade-marks  to  the  selling  of  textiles 
offers  some  problems  which  are  particularly  difficult.  There 
is,  however,  no  field  in  which  the  indirect  results  secured  by 
the  exploiter  of  the  trade-mark  are  more  worth  striving  for  than 
they  are  in  the  textile  field.  S.  R.  Latshaw,  the  manager  of 
the  Textile  Department  of  the  Curtis  Publishing  Company, 
discusses  in  the  following  paragraphs  some  phases  of  the  use 
of  trade-marks  in  that  field: 

*For  more  than  five  years  I  have  carefully  watched  the 
development    and    change    of    selling    methods    in    the    knit 

*Printers  Ink,  July  4,  1912,  p.  68. 


364        ADVERTISING  AS  A  BUSINESS  FORCE 

goods  industry.  When  I  first  came  to  these  meetings  there 
was   some    interest   and  much  derision   for    the    newly    risen 

Trade-    guaranteed    hosiery    campaigns.      The     next     year 

marks  there  was  more  interest  and  less  amusement,  and 
in  Selling  so  on,  until  to-day  the  interest  predominates.     I  am 

Textiles  j^qj.  especially  concerned  in  discussing  here  any  single 
phase  of  the  more  modem  selling  methods,  but  rather  in  the  con- 
sideration of  general  underlying  conditions  that  seem  to  point 
to  a  course  which  will  bring  more  profit  for  you  in  the 
future. 

You  remember  some  of  the  first  automobiles  we  saw  years 
ago,  traveling  uncertainly  about,  perched  on  bicycle  wheels, 
emitting  clouds  of  steam  and  often  raising  from  some  passerby 
the  cry,  "Get  a  horse."  Little  did  any  of  us  think  then  of  the 
ten-ton  truck  and  the  seventy-miles-an-hour  touring  car  of 
to-day.  You  may  question  the  logic  of  a  comparison  between 
a  machine  and  a  method,  but  I  can  confidently  say  that  in 
1917  we  will  be  equally  surprised  by  the  changes  which  five 
years  will  have  made  in  the  selling  of  knit  goods. 

Changes  now  going  on  in  other  branches  of  the  textile 
industry,  both  in  manufacturing  and  selling,  demand  your 
attention  and  consideration  as  affecting  the  future  of  your  own 
concerns.  An  important  change  has  taken  place  in  the  jobbing 
field.  Within  the  last  decade  the  great  department  stores 
have  so  strongly  entrenched  themselves  in  their  rights  to 
buy  from  "first  hands"  that  the  jobbers  have  generally  relin- 
quished their  proprietary  claims,  and  have  seen  the  mills 
sell  direct  to  our  leading  fifteen  hundred  stores. 

This  "selling  direct"  to  dealers  by  the  mills  has  now  even 
progressed  beyond  the  leading  retailers  and  frequently  extends 
to  the  remote  outposts  and  "tank  towns."  This  is  shown 
notably  in  the  knit  goods  field;  many  New  York  State  and 
Western  manufacturers  are  sending  salesmen  to  every  town 
where  there  are  dealers  worthy  of  notice. 

The  jobbers  are,  of  course,  trying  to  adjust  themselves  to 

these  altered  selling  methods.     The  two  leaders  in  the  East 

and   West  are  proceeding  in  opposite   directions.         In    the 

Differing    East  the  H.  B.  Claflin  Company  interests  are  buy- 

Meihods  —  ing  the   control   of   many   important  retail   dealers. 

East  and  thus  gracefully  covering  a  retreat  from  their  former 

^^*^      position  as  exclusively  middlemen.     Claflin  not  only 

"sells  the  trade"  —  he  ?.s'  the  trade. 


TRADE-MARK  PROBLEMS  365 

Marshall  Field,  on  the  other  hand,  while  continuing  the 
most  notable  Western  retail  establishment,  is  now  buying  and 
leasing  mills.  From  the  unstable  ground  of  the  jobber  Marshall 
Field  &  Co.  are  becoming  distributing  manufacturers.  In 
making  this  move  they  have  followed  the  lead  of  Lord  & 
Taylor  and  Brown-Durrell,  who  have  both,  as  you  know,  made 
great  successes  in  the  fine  knit  goods  field. 

The  real  competition  in  the  future  will  undergo  a  manifest 
change,  due  to  these  improved  selling  methods.  There  is 
little  likelihood  of  any  phenomenal  improvements  in  manufac- 
ture. But  the  selling  of  to-day  is  archaic.  It  must  be  brought 
down  to  date. 

While  it  is  true  that  there  are  more  brands  of  hosiery  adver- 
tised to-day  than  any  other  one  textile  product,  and  while 
you  men  deserve  great  credit  for  your  quicker  perception  of 
future  needs,  it  is  nevertheless  astonishing  that  there  is  so 
comparatively  little  hosiery  sold  under  the  advertised  mill 
brand. 

In  1909  the  aggregate  production  of  hosiery  amounted  to 
more  than  two  hundred  million.  Of  this  enormous  total, 
less  than  twenty  million,  10  per  cent.,  bore  the  name  of  a 
national  advertiser.  And  yet,  of  all  textiles,  a  pair  of  hose 
is  obviously  best  suited  to  modern  selling  methods.  For 
instance,  what  are  the  two  factors  that  contribute  most  to  the 
advertisability  of  any  commodity.?  First,  ease  of  identification 
by  the  consumer  as  well  as  by  the  trade.  Second,  widespread 
and  continuing  demand.  As  for  identification  the  identity  of 
two  stockings  is  rarely  changed  from  the  time  they  leave  the 
maker's  hands  until  they  are  put  on  the  consumer's  feet.  It 
is  easy  and  inexpensive  to  apply  a  hosiery  or  underwear  trade- 
mark, and  the  package  for  box  allows  great  opportunity  for 
further  identification.  You  gentlemen  do  not  face  the  puzzling 
and  vexatious  problems  of  the  converter,  the  cutter-up,  the 
manufacturing  clothier,  and  the  other  inevitable  middlemen 
who  alter  and  change  the  very  nature  of  the  products  of 
the  woolen,  cotton,  and  silk  manufacturers  as  they  pass  through 
their  hands. 

As  for  the  demand  —  well,  everybody  wears  them. 

jj    .        They  are  constantly  being  worn  out  (consiuned)  and 

Outlet     ^s  constantly  being  replaced.     They  are  sold  in  1,400 

department   stores,    28,000    drygoods    stores,    8,300 

men's  furnishings  stores,  and  148,000  general  stores — a  total  of 


366        ADVERTISING  AS  A  BUSINESS  FORCE 

185,000  outlets  in  this  country.  What  class  of  goods  could  be 
expected  to  respond  more  vigorously  to  the  stimulus  of  scien- 
tific selling? 

It  is  probable  that  the  very  openness,  directness,  and  sim- 
plicity of  the  manufacture  of  knit  goods  accounts  for  the  pre- 
vailing simplicity  in  selling  methods  to-day. 

It  is  comparatively  easy  to  engage  in  the  making  of  knit 
goods  —  a  httle  capital,  a  loft  in  Kensington,  a  boss  knitter, 
some  machines  on  easy  terms  —  and  you  have  another  manu- 
facturer. This  manufacturer  may  be  unsuccessful.  He  may 
have  little  knowledge  of  costs  and  may  follow  methods  which 
land  him  in  the  bankruptcy  courts,  but  in  doing  so,  while  he 
is  going  his  pace,  you  have  just  one  more  factor  in  the  demorali- 
zation of  your  market. 

You  can,  of  course,  attain  a  certain  degree  of  manufacturing 
superiority.  You  can  conceivably  buy  your  raw  material  a 
bit  more  shrewdly,  but  when  your  line  can  be  so  rapidly  dupli- 
cated and  your  machines,  your  help  and  your  raw  materials  so 
easily  secured  by  a  competitor,  your  real  advantage  must  lie 
almost  wholly  in  the  thoroughness  of  the  belief  of  the  public 
in  the  intrinsic  quality  of  your  goods,  which  will  give  rise 
to  constant  and  unassailable  demand. 

It  would  seem,  then,  that  you  manufacturers  would  cling 

Trade-  tenaciously  to  a  trade-mark  representing  good-will, 
marks  because  that  trade-mark  is  really  the  only  permanent, 
as  an     inalienable  asset  you  can  have. 

Asset  'Pq  gj^  calmly  in  a  barren  office  and  allow  one's 

self  and  one's  mill  to  drift  is  the  shame  of  many  a  mill  man. 
Men  so  old  as  to  acknowledge  their  inactivity  and  their  dread  of 
any  change  manage  properties  with  a  single  eye  to  the  imme- 
diate future  and  its  immediate  dividends.  The  hne  of  least 
resistance  —  providing  it  is  lucrative  —  whether  that  means 
selling  to  a  broker,  to  a  catalogue  house  or  to  a  syndicate 
buyer,  appeals  to  the  sort  of  mill  men  who  are  neither  practical 
manufacturers  nor  practical  sales  executives. 

If  you  make  goods  on  contract  for  this  man  to-day,  for  that 
man  to-morrow,  your  mill,  your  future,  your  profits  depend 
entirely  and  absolutely  on  one  advantage:  that  of  superior 
manufacturing  ability. 

Your  goods,  unless  they  bear  your  brand  and  your  trade- 
mark, are  not  your  goods  after  they  are  sold  to  the  store; 
unless  the  merits  of  your  line  are  known  to  be  the  merits  of 


TRADE-MARK  PROBLEMS  367 

your  mills,  you  can't  he  certain  to  continue  the  profit  due  you. 
You  may  make  goods  for  "  Perlmutter  &  Potash  "  as  long  as  they 
can't  beat  your  price.  When  they  can,  how  many  of  your 
goods  are  rejected,  what  control  have  you  on  the  situation  other 
than  your  ability  to  manufacture  more  cheaply  or  your  will- 
ingness to  take  less  profit? 

The  means  and  methods  for  simple  practical  trade-marking 
have  been  fully  developed.  The  jobber  has,  with  a  few  excep- 
tions, been  willing  to  "push"  the  sale  of  a  mill-brand  goods, 
when  these  goods  were  of  a  quality  to  justify  the  consumers' 
demands  that  had  been  previously  created  for  them.  The 
retail  dealers  —  I  have  stated  that  there  are  more  than  one 
hundred  and  eighty-five  thousand  who  sell  hosiery  and  under- 
wear —  with  the  exception  of  about  twenty -five  of  the  leading 
metropolitan  department  stores,  are  glad  to  carry  and  sell 
honest  goods  bearing  a  mill  identity  for  which  an  honest  and 
genuine  consumer  demand  has  been  created.  Even  these 
twenty-five  stores  carry  many  of  the  different  lines  under  the 
mill  brands  because  the  demand  has  been  made  so  insistent. 

The  machinery  and  methods  for  creating  a  consumer  demand 
for  quality  goods  bearing  the  brand  of  the  manufacturer  are 
basically  alike  with  all  great  lines  of  merchandise. 

But,   notwithstanding   the   element  of  similarity  in  selling 

methods,  there    are   certain    difi^erences  in   textile   conditions 

which  must  be  reckoned  with  and  arranged  for  intel- 

The      ligently.     The  jobbers  are  fewer  in  number  and  far 

Cannot  ^^re  powerful  and  important  than  in  any  other  indus- 
Be  Forced  tries.  The  department  stores  with  their  great  pres- 
tige and  following  had  their  birth  in  the  drygoods 
line.  Their  individual  investments  in  their  own  advertising 
in  any  great  city  dwarf  in  amount  the  national  appropriation 
of  any  three  textile  manufacturers.  The  importance  of  these 
factors  make  their  "coercion  "  well  nigh  impossible  and  widely 
impolitic.  No  method  of  "clubbing  the  dealer  into  line"  can 
be  used  in  the  textile  field.  But  with  changes  in  all  the  factors 
in  textile  distribution  —  commission  house  changes,  jobber 
changes,  cutting-up  changes  —  there  is  only  one  changeless 
factor:  the  ultimate  consumer.  To  his  wants  and  to  her 
wants  we  all  cater;  because  of  him  and  because  of  her  compe- 
tition exists. 

All  our  stores  compete  for  the  consumer's  trade;  so  do  the 
Perlmutters    and    Potashs;    so    do    the    mills.     Every    selling 


368        ADVERTISING  AS  A  BUSINESS  FORCE 

factor  studies  to  please  the  consumer;  the  wishes  of  the  con- 
sumers are  more  potent  than  the  commands  of  an  emperor. 
The  consumer  wants  quality  and  honesty  in  the  fabrics  pur- 
chased; the  consumer  wants  to  buy  intelligently;  the  consumer 
believes  that  the  men  who  make  the  goods  know  most  about 
them.  If  you  make  honest  goods  and  if  you  put  your  name 
on  these  goods,  and  if  you  help  the  consumer  to  discover  these 
two  facts,  the  wish  to  buy  your  goods  will  be  expressed  so 
unmistakably  that  a  large  percentage  of  the  retail  stores  will 
be  glad  to  buy  and  sell  your  goods  under  your  trade-mark 
to  the  only  permanent  friend  any  manufacturer  can  have  — 
the  ultimate  consumer. 

One  of  the  most  successful  cases  of  fortunate  choice  of  trade- 
mark policy,  and  skilful  development  of  the  policy  once  chosen, 
in  a  textile  line  is  to  be  found  in  the  case  of  "Onyx  Hosiery," 
which  is  a  jobber's  brand  placed  on  hosiery  manufactured  for 
the  Lord  &  Taylor  Company,  of  New  York.  Joseph  H.  Emery, 
president  of  the  company,  has  the  following  to  say  about  the 
policy  which  the  company  has  religiously  preserved  since  it  be- 
gan exploiting  the  Onyx  trade-mark: 

*I  am  sometimes  asked  about  the  upbuilding  of  the  "Onyx" 

hosiery  business  by  people  whose  questions  seem  to  indicate 

that  they  suppose  every  success   must  contain   the 

The  Case  elements  either  of  the  mysterious  or  the  sensational. 

Hodery  Now  there  may  be  great  successes  in  the  commer- 
cial world  which  have  been  achieved  through  the  art 
of  the  conjurer  —  I  do  not  know.  But  when  it  comes  to  the 
history  of  "Onyx"  hosiery,  the  record  is  wholly  devoid  of 
pyrotechnics. 

And  it  is  a  rather  satisfying  history  to  look  back  upon.  We 
are  about  ready  to  celebrate  our  quarter-centennial.  In  the 
twenty-five  years  the  business  has  grown  from  $340,000  to 
$8,512,024  a  year,  and  the  pleasantest  part  of  it  is  that  the 
growth  has  taken  the  form  of  a  steady,  healthy  progress. 
There  has  never  been  a  time  when  nitro-glycerine  had  to  be 
injected  to  save  the  patient.     .     . 

We  started  in  moderately  at  first,  believing  that  in  order  to 

*Printers   Ink,  January  18,  1912,  p.  3. 


TRADE-MARK  PROBLEMS  360 

create  a  demand  among  the  dealers  in  hosiery  we  should  have 
to  gain  the  approval  of  the  public.  We  also  believed  that, 
though  we  had  a  fine  selling  organization  and  the  best  possible 
goods  on  the  shelves,  without  advertising  we  should  attain  only 
a  moderate  success.  Therefore  we  considered  it  necessary 
to  combine  with  the  two  assets  —  a  high  standard  of  product 
and  an  efficient  selling  organization  —  advertising  which  should 
reflect  the  same  qualities  which  we  believed  we  put  into  the 
product. 

We  did  not  start  with  any  thrillers  or  record-breakers.  We 
appealed  to  the  public  just  the  same  as  an  individual  salesman 
would  appeal  to  his  customers,  without  undue  dignity  on  the 
one  hand,  nor  sensationalism  on  the  other.  We  told  the  story 
of  Onyx  quality  and  Onyx  honesty  in  plain  and  direct  language 
—  and  with  very  gratifying  results. 

From  the  start  we  have  maintained  the  policy  of  co-operating 
with  dealers  to  the  fullest  extent  possible.  We  did  not  permit 
the  "Onyx"  brand  to  be  used  as  a  football  in  the  indiscriminate 
cutting  of  prices.  We  adopted  every  improvement  that  experi- 
ence could  suggest  in  order  to  keep  the  standards  continually 
at  high-water  mark,  and  so  that  our  dealers,  with  the  adver- 
tising helps  and  our  ability  to  deliver  all  duplicate  orders 
promptly,  could  keep  up  regular  lines  of  merchandise  and  make 
a  satisfactory  turnover. 

The  adoption  of  our  brand-name  was  decided   upon  after 

a  great  many  different  suggestions  were  rejected,  all  of  which 

tended  toward  a  descriptive  term  which  would  signify 

R      '^w     ^  ^^^^  black.     While  "Onyx"  is  the  name  of  a  stone 

Started  *^^  various  hues,  it  is  usually  identified  with  an  indelible 
black,  hence  its  adoption.  Whether  it  suggests  a  fast 
black  color  to  the  public  or  not,  it  is  a  short  word,  quickly  rec- 
ognized, and  easy  to  remember,  and  is  solidly  identified  with 
hosiery  of  our  manufacture.  In  fact,  it  is  known  to-day  in 
practically  all  quarters  of  the  civilized  world. 

Our  choice  of  a  trade-mark  is  another  instance  of  the  princi- 
ples described  above.  Note  how  simple  it  is  —  only  four 
letters  of  the  alphabet  are  employed  and  anybody  can  pro- 
nounce it  on  sight.  It  would  have  been  easy  to  have  selected 
something  more  sensational  —  and  incidentally  more  com- 
plicated. It  is  a  theory  in  art  that  the  simplest  things  are 
the  most  difficult  to  do,  and  the  most  worth  while  after  they 
are  done. 


370        ADVERTISING  AS  A  BUSINESS  FORCE 

A  feature  of  "Onyx"  policy  is  to  avoid  friction  with  the 
dealer.  A  common  source  of  disaffection  on  the  part  of  re- 
tailers is  the  manufacturer's  inability  to  fill  orders  promptly. 
This  is  especially  apt  to  be  the  case  in  such  a  line  as  hosiery 
where  there  are  many  different  styles,  each  stj'le  in  a  variety 
of  colors,  and  each  color  in  a  diversity  of  sizes.  We  keep  a 
large  capital  locked  up  in  reserve  stock.  Some  people  might 
think  we  could  run  on  a  smaller  margin  but  we  figure  that  it  is 
just  so  much  invested  for  dealer  good-will. 

Again  we  go  to  much  pains  to  keep  posted  on  every  phase  of 
hosiery  information,  which  is  culled  from  many  sources.  We 
know  the  viewpoint  of  the  consumer,  the  dealer,  and  the  dis- 
tributor. We  study  fashions.  We  have  shades  to  match 
every  costume  and  shoe.  Our  selling  organization  keeps  us 
posted  as  regards  conditions,  and  any  new  demands  which  are 
springing  up  are  instantly  reported.  We  are  always  ready  to 
add  any  new  line  for  which  there  is  a  demand  in  any  quarter. 
It  is  our  constant  endeavor  to  maintain  our  business  at  the 
point  where  a  customer  can  secure  under  the  "Onyx"  brand 
any  kind  of  hosiery  desired.  That,  too,  binds  us  closer  to  the 
dealer. 

Advertising  continuity  is  another  reason  —  perhaps  the 
main  reason  —  for  the  wide  recognition  of  the  "Onyx"  trade- 
mark. When  the  advertising  question  was  taken 
Continuity  "P  ^^^^  o^r  concern,  we  realized  that  to  make  it  a 
success  it  was  necessary  to  start  small  and  broaden 
out  as  the  seasons  advanced.  We  knew  it  required  patience. 
We  did  not  expect  miracles.  The  public  takes  time  to  render 
its  decisions,  and  it  must  be  absolutely  sure  before  it  consents 
to  give  lasting  approval.  We  regarded  the  money  spent  for 
advertising  as  an  investment,  and  not  an  expense.  We  realized 
that  it  was  impossible  to  make  any  lasting  success  by  a  "whirl- 
wind" campaign. 

Due  thought  has  always  been  given  to  the  dealer's  end  of 
the  advertising  campaign.  We  have  been  careful  to  advise 
him  of  every  advertising  benefit  we  were  putting  forth,  enabling 
him  to  keep  in  touch  with  these  efforts  and  reap  the  benefit 
of  the  increased  demand. 

Advertising  helps  are  furnished  to  all  dealers;  copies  of 
magazine  advertisements;  advertising  co-operation  in  local 
newspapers;  assistance  in  the  matter  of  special  sales,  etc.; 
co-operation  in  every  possible  manner  which  will  help  the  dealer 


TRADE-MARK  PROBLEMS  371 

in  selling  his  own  goods,  so  that  the  selling  of  the  "Onyx" 
brand  is  a  matter  of  keen  satisfaction  to  him.  We  have 
always  believed  in  making  the  merchandising  operations  as 
simple  and  direct  as  possible,  and  in  using  every  known  means 
of  promoting  the  sale  of  an  honest  product  with  profit  to  all 
concerned. 

The  conditions  in  the  past  year  have  been  the  most  diffi- 
cult we  have  ever  had  to  overcome.  There  has  been  a  tremen- 
dous lot  of  advertising  of  guaranteed  hosiery,  but 

When  through  it  all  our  sales  have  steadily  increased.  It  is 
tion&r  ^'  ^^^y  likely  that  the  percentage  of  increase  was  affected 

Strong  somewhat  by  the  guaranteed  hose  advertising,  but 
the  rebound  during  the  past  year  has,  we  believe 
more  than  made  it  up.  The  intelligent  and  critical  public  has 
weighed  up  the  guaranteed  hose  proposition  pretty  thoroughly, 
and,  we  believe,  is  returning  to  its  first  love.  The  vast  sums  of 
money  we  spent  through  many  years  have  not  been  wasted. 

In  meeting  competition  of  this  and  other  varieties,  we  never 
go  out  of  our  way  to  fight  it  with  its  own  weapons.  We  simply 
redouble  our  efforts  to  be  absolutely  fair  with  our  customers, 
and  to  convince  them  that  we  are  working  for  their  interest  as 
well  as  our  own.  We  have  always  made  the  statement  that  any 
buyer  could  come  on  our  sales  floor  and  go  over  the  entire 
line  blindfolded,  with  the  assistance  of  any  one  of  our  salesmen, 
and  feel  perfectly  safe. 

Our  appeal  throughout,  as  is  evidenced  in  the  copy  which 
has  been  run  for  "Onyx"  hosiery,  has  been  to  the  refined  middle 
class  —  neither  the  exclusive  portion  of  the  trade  which  will 
buy  only  that  which  is  high  in  price,  nor  the  part  which  is 
bargain  hungry.  We  have  avoided  the  sensational  and  the 
exclusive  alike.  Our  endeavor  has  been  to  give  every  announce- 
ment the  atmosphere  and  the  flavor  of  quality,  without  going 
so  far  as  to  suggest  that  the  price  must  be  beyond  the  reach 
of  people  of  ordinary  means. 

We  feel  that  our  business,  in  one  sense,  is  only  in  its  infancy, 
and  we  look  forward  to  general  and  steady  increase.  Twenty- 
five  years  of  experience  has  only  served  to  strengthen  us  in 
our  belief  that  a  staple  product  can  and  should  be  advertised, 
and  that  it  is  not  only  unnecessary  but  a  mistaken  policy  to 
search  for  "features"  which  may  be  made  the  basis  for  a 
sensational  appeal. 

The  principles  of  successful  salesmanship  apply  to  successful 


372        ADVERTISING  AS  A  BUSINESS  FORCE 

advertising.  You  will  find  the  best  salesmen  do  not  introduce 
"side  issues"  into  their  talk.  They  try  to  make  the  prospect 
concentrate  on  the  most  vital  idea.  The  salesman  who  intro- 
duces many  irrelevant  things  into  his  talk  and  asks  the  possible 
customer  to  follow  him  on  a  mental  hare-and-hounds'  race 
does  not  build  up  a  reputation  as  a  "closer."  That  is  why 
we  keep  our  advertising  on  a  straight  middle-of-the-road  policy. 

If  any  one  were  trying  to  extract  a  moral  from  the  history  of 
"Onyx"  success,  I  suppose  it  could  best  be  summed  up  in 
the  single  word,  "Consistency."  We  have  tried  to 
The  Moral  y^^  consistent  in  the  general  tone  of  our  talk  to  the 
Advertising  public,  consistent  in  adhering  to  a  plain,  common- 
sense  policy  of  merchandising  and  consistent  in  never 
giving  the  people  a  chance  to  forget  our  trade-mark. 

If  modern  developments  in  advertising  mean  anything  they 
mean  that  advertising  is  nothing  more  than  an  adequate 
interpretation  to  possible  buyers  of  your  goods.  This  being 
so.  Lord  &  Taylor  have  consistently  endeavored  to  so  write 
their  advertising  that  it  will  not  misinterpret  the  product 
into  the  making  of  which  we  have  put  a  quarter-century  of 
our  efforts.  It  seems  to  me  that  any  element  of  extravagance. 
or  even  hysteria,  is  most  unwise.  Straining  after  effect  has 
its  inevitable  result  in  copy  which  does  not  honestly  represent 
the  goods;  indeed  the  shrewd  xA.merican  man  or  woman,  instinc- 
tively, is  apt  to  discount  such  "emphasis"  and  visit  an  uncon- 
scious suspicion  on  the  product. 


TRADE-MARK   PROBLEMS 

The  problems  of  trade-mark  selection,  registration  and 
exploiting  are  only  three  of  many  groups  which  are  encountered 
very  early  in  his  work  by  the  developer  of  any  trade-mark. 
H.  L.  Allen,  who  has  already  been  quoted  in  regard  to  trade- 
marks, gives  the  following  account  of  how  some  difiicult  and 
unusual  problems  in  trade-mark  development  were  met  and 
solved : 

*  It  is  necessarily  one  of  the  provisions  of  the  trade-mark 
law  that  a  trade-mark  must  be  affixed  to  the  goods  for  which 

*Advertising  and  Selling,  June,  1912,  p.  12. 


TRADE-MARK  PROBLEMS  373 

it  is  registered;  otherwise  the  courts  will  not  allow  its  validity 
when  cases  of  infringement  arise. 

There  are  various  ways  in  which  trade-marks  are  afSxed 
to  goods.  They  may  either  be  printed,  stamped,  stenciled, 
branded,  cast,  pasted,  sewed  or  woven  on  the  product;  or, 
as  a  general  rule,  in  case  the  trade-mark  cannot  be  affixed 
in  any  of  these  ways  to  the  product  itself,  as  in  the  case  of  a 
liquid,  it  may  be  affixed  in  any  one  of  a  number  of  ways  to 
the  container  of  that  product. 

It  is  very  interesting  to  study  the  ingenious  ways  in  which 
some  manufacturers  affix  distinguishing  marks  to  their  products. 
Perhaps  one  of  the  most  remarkable  instances,  and  yet  one 
which  creates  no  wonderment  at  all  because  it  is  so  common, 
is  the  trade-marking  of  paper  by  means  of  water-marks.  These 
have  been  so  long  in  use  that  we  do  not  realize  that  the  first 
manufacturer  of  paper  to  evolve  a  method  of  water-marking 
his  output  was  very  ingenious,  inasmuch  as  the  water-mark 
is  an  inseparable  part  of  the  paper  without  in  the  least  dimin- 
ishing its  worth. 

Sometimes  simply  a  change  in  the  method  of  marketing  a 
product  means  that  it  will  be  difficult  to  trade-mark.  This  is 
jjarticularly  so  in  the  case  of  drinks.  When  a  drink  is  put  up 
in  bottles  which  reach  the  ultimate  consumer,  the  problem  of 
trade-marking  is  easy.  All  one  has  to  do  is  to  paste  a  trade- 
mark label  to  the  bottle. 

True,  there  is  the  unscrupulous  dealer  who  stoops  to  refilling 
bottles  with  spurious  substitutes  and  who  sells  them  as  the 
genuine  trade-marked  product.  But  there  are  various  devices 
to  make  this  impossible,  such  as  bottles  that  cannot  be  refilled 
and  stoppers  that  cannot  be  replaced.  Many  of  the  better 
champagne  producers  have  evolved  the  unique  scheme  of 
affixing  their  trade-mark  to  the  bottom  of  the  corks  used  in 
the  mouths  of  their  bottles.  When  the  consumer  has  been 
educated  to  look  for  this  trade-mark  on  the  cork,  it  makes  it 
impractical  for  the  dealer  to  soak  a  label  off  an  empty  bottle 
which  once  contained  that  champagne  and  to  paste  it  on  a 
substitute  champagne.  It  should  be  realized  that  the  trade- 
mark cork  cannot  be  removed  without  being  mutilated  Or 
broken  by  a  corkscrew. 

But  suppose  that  the  drink  does  not  reach  the  ultimate 
consumer  in  the  original  bottle  but  in  bulk.  How  can  a 
manufacturer  evolve  a  plan  of  trade-marking  a  liquid  not  in  a 


374        ADVERTISING  AS  A  BUSINESS  FORCE 

container?  It  sounds  difficult  and  it  is  difficult.  The  more 
one  studies  it,  the  more  exasperating  it  seems.  Apparently 
one  might  as  easily  paint  one's  advertisement  on  the  flowing 
waters  of  Niagara  Falls  as  to  affix  a  trade-mark  to  a  liquid 
product  that  is  not  marketed  in  a  container. 

This   is  exactly  the  problem    which    confronted  Renter  & 

Co.,   ale   and   porter   brewers  of  Boston,   several   years   ago, 

Puttina  a  ^^  selling  Sterling  Ale  as  a  draught  drink  over  the 

Trade-     counter.      Yet  to-day,  according  to  every  outward 

mark  on   evidence,  and  according  to  the  testimony  of  B.  A. 

Draught  Smalley,  the  advertising  manager  of  that  company, 
^  ^  Sterling  Ale  is  a  great  success  as  a  trade-marked 
draught  drink  and  substitution  by  dealers  of  other  ales,  the 
bugaboo  of  the  business,  is  a  negligible  quantity. 

In  this  instance  the  seemingly  impossible  has  been  accom- 
plished by  means  of  a  special  faucet,  designed,  patented,  owned, 
and  controlled  by  Renter  &  Co.,  and  also  by  means  of  a  policy 
in  connection  with  the  installation  and  use  of  that  faucet. 

The  latter  has  an  essential  principle  about  its  construction 
which  is  unique  and  thus  patentable.  But  the  all-important 
part  about  it  is  that  it  has  a  big  blue  and  white  handle  on  it, 
which  carries  on  two  sides  prominently,  so  that  it  can  be 
easily  seen  and  recognized  by  the  consumer,  a  circular  trade- 
mark emblem. 

This  faucet  is  not  sold  to  the  dealer;  it  is  loaned  to  him  under 
certain  strict  legal  provisions  as  to  its  use  for  serving  Sterling 
Ale  and  only  Sterling  Ale.  The  fact  that  it  is  a  patented 
device  further  strengthens  the  right  of  Renter  &  Co.  to  legally 
stipulate  the  manner  in  which  the  faucet  shall  be  used. 

A  patent  is  a  monopoly  of  monopolies.  Letters  patent  grant 
their  owners  monopolistic  rights  of  manufacture.  Therefore 
the  courts  allow  that  anything  which  "flows  out"  of  a  patent, 
such  as  a  license  to  the  dealer  even  though  highly  monopolistic 
in  nature,  is  substantiated  and  authorized  by  the  law, 

iVnd  this  principle  applies  not  only  to  licenses  covering  the 
maintenance  of  price  on  but  to  licenses  covering  the  use  of 
patented  devices.  And  this  is  especially  the  case  when  a  device 
is  not  sold  but  is  loaned,  as  in  the  ca^e  of  the  Sterling  Ale 
faucet. 

It  has,  of  course,  been  necessary  for  Renter  &  Co.  to  educate 
the  public  to  look  for  this  faucet,  to  realize  what  it  stands 
for,  and  to  insist  upon  its  use.     This  has  been  accomplished 


TRADE-MARK  TROBLEMS  375 

by  means  of  steady  and  extensive  advertising  in  the  news- 
papers.    .     .     . 

The  faucet  is  called  "The  Official  Faucet"  and  is  invariably 
illustrated  as  large  as  practical  in  each  advertisement.  The 
size  of  the  copy  is  usually  three  columns  by  from  6  to  10  inches 
in  depth. 

Hire's  Root  Beer  and  similar  drinks  have  been  trade-marked 
very  similarly  as  over-the-soda-counter  draught  drinks  by  the 
employment  of  special  trade-marked  urns  which  are  loaned  the 
dealers  and  by  the  strict  legal  enforcement  of  regulations  pro- 
hibiting the  use  of  such  urns  as  receptacles  for  other  than  such 
authorized  drinks.     .     .     . 

Not  essentially  different  from  Renter  &  Co.'s  method  of 
trade-marking  their  draught   ale   have  been  the  methods   of 

^    .        certain  of  our  more  enterprising  textile  manufacturers 

a  'lextile  ^^^  converters  to  make  certain  that  their  marks  of 

^ra(fe-ma^^■  identification  shall   remain  with  their  textiles  even 

on  Ready-  after  the  latter  have  been  cut  and   fashioned  into 

made  garments  by  the  makers-up.  Probably  the  most 
shining  example  in  this  field  is  B.  Priestly  &  Co., 
of  Cravenette  fame.  Strictly  speaking,  this  company  should 
not  be  classed  among  the  textile  manufacturers,  for  the  word 
"Cravenette"  represents  a  process  rather  than  any  particular 
textile.  The  process  is  one  of  waterproofing,  and  any  manu- 
facturer's textiles  can  be  "Cravenetted."  To  trade-mark  such 
a  process  so  that  the  consumer  shall  insist  that  it  be  employed 
is  no  easy  matter. 

In  this  instance  the  "Open  Sesame"  into  the  ranks  of  the 
successful  trade-markers  has  been  effected  by  means  of  a 
garment  label  given  to  the  garment  maker  whose  textiles  are 
being  made  waterproof,  and  then  advertising  that  label  to 
the  consumer  so  insistently  that  the  garment  maker  can  ill 
afford  not  to  link  up  his  garments,  by  sewing  that  label  in  its 
proper  place,  with  the  strong  consumer  demand  which  the 
Priestley  advertising  has  created. 

There  was  no  compulsion  used;  no  threats  made  or  promises 
exacted.  The  only  compelling  power  has  been  that  greatest 
of  all  pullers  in  business,  the  desire  for  bigger  profits  and  larger 
sales. 

To-day  the  trade-marking  of  Cravenetted  garments  is  so 
successful  that  the  word  "Cravenette"  has  been  elected  to  a 
place  among  the  select  coterie  of  words  which  have  come  to 


376        ADVERTISING  AS  A  BUSINESS  FORCE 

have  a  generic  sense  as  a  result  of  much  publicity,  such  as 
Vasehne,  Kodak,  Celluloid  and  a  few  others. 

The  same  general  scheme  of  a  widely  advertised  trade- 
mark label  has  been  at  the  bottom  of  the  success  of  A.  G. 
Hyde  &  Sons  with  Heatherbloom  Petticoats.  But 
bloom'  ^^^  ways  and  means  in  this  instance  have  been  a  little 
Petticoats  different.  A.  G.  Hyde  &  Sons  do  not  make  Heather- 
bloom  Petticoats;  they  simply  supply  the  textile  to 
the  trade  with  loose  garment  labels.  But  instead  of  showing 
the  garment  maker  the  unwisdom  of  not  linking  up  with 
Heatherbloom  advertising  by  attaching  the  label,  as  in  the 
case  of  Cravenette,  the  screws  are  used  and  the  garment 
worker  is  compelled  to  sew  on  the  label  in  the  case  of  Heather- 
bloom Petticoats  or  else  get  no  more  textile. 

Heatherbloom,  a  taffeta,  was  first  advertised  simply  as  a 
novelty,  with  no  mention  made  of  petticoats.  Instead,  its 
virtues  as  a  textile  for  petticoats  were  only  brought  out  by 
chance.  And,  even  then,  it  was  only  when  competitive  articles 
began  to  appear  on  the  market  with  similar  sounding  names, 
that  A.  G.  Hyde  &  Sons  foresaw  the  wisdom  of  carrying  their 
case  to  the  consumer  as  the  court  of  last  resort  in  order  to 
create  a  consumer  demand.  And  it  was  not  long  before  this 
concern  not  only  found  itself  in  a  position  to  successfully 
insist  that  garment  makers  attach  the  advertised  trade-mark 
label,  but  in  a  position  also  to  dictate  the  minimum  selling 
price  of  petticoats  and  even  the  number  of  yards  such  petti- 
coats must  contain,  as  well  as  several  other  ultimatums  such 
as  it  would  not  have  dared  suggest  before. 

Belding  Bros.  &  Co.,  making  Belding's  Satin,  which  is  used 
for  linings  to  garments,  have  attained  the  same  end  by  means 
of  a  guarantee  tag  which  is  provided  for  those  garment  makers 
who  use  Belding's  Satin.  The  tag  reads:  "This  tag  insures 
the  wear  of  your  lining.  Should  the  lining  give  unsatisfactory 
wear,  return  the  garment  to  us,  express  paid,  together  with  this 
tag  and  we  will  re-line  without  charge."  This  tag  has  been 
widely  advertised  to  the  trade  and  to  the  consumer,  so  that 
to-day  it  has  come  to  be  a  definite  and  positive  evidence 
of  quality  in  a  garment  and  that  garment  maker  who  would 
prefer  not  to  attach  it,  or  that  dealer  who  Mould  not  take  the 
pains  to  have  his  customer  see  it  when  attached,  are  not  good 
business  men. 

E.  B.  Moore  &  Co.,  New  York,  making  all  wool  fabrics  for 


TRADE-MARK  PROBLEMS  377 

men's  clothing,  have  aimed  at  the  same  end  by  supplying  the 
garment  makers  with  their  trade-marked  buttons  for  use  on 
the  garments  they  make,  and  then  by  advertising  that  button 
to  the  general  public. 

The    Clinton    Wire    Cloth    Company,    making    Pompeiian 

Bronze  Cloth  for  use  on  window  screens  used  to  keep  insects 

out,  had  a  peculiar   problem    when    attempting   to 

Wire  settle  upon  a  distinctive  and  sure  trade-mark  guide 
Cloth  and  ^^  ^j^g  purchaser.      The  problem  was   happily  and 

Traded    successfully  solved  when  a  removable  red  string  in 

marks  the  selvage  of  the  wire  cloth  was  decided  upon  as  a 
mark  of  identification.  Because  of  the  nature  of  the 
product  no  trade-mark  could  be  stamped  upon  it  unless  large, 
and  if  large  it  would  be  obtrusive  and  objectionable. 

The  Samson  Cordage  Company  trade-marks  its  clothes  line 
by  means  of  another  ingenious  device  which  consists  of  one 
red  strand  of  yarn  braided  in  among  the  white  in  such  a  way 
that  it  comes  to  the  surface  just  so  often  in  the  form  of  a 
diamond.  And,  what  is  more,  this  mark  has  been  made 
inseparable  with  the  goods  by  incorporating  a  reference  to  it 
in  the  name  of  the  goods  which  is  Samson  Spot  Clothes  Line. 

The  method  of  inserting  the  trade -mark  into  the  selvage  is 
not  uncommon.  It  is  the  method  usually  used  by  fabric 
makers  and  carpet  makers.  In  some  cases  it  is  stamped  on; 
in  others  it  is  woven  in;  in  the  case  of  Brenlin  Window  Shades 
it  is  placed  on  every  yard  of  the  goods  on  the  selvage  at  either 
side  in  small  perforated  letters.  The  difficult  aim  in  all  such 
instances  as  these  is,  of  course,  to  adopt  a  mark  which  will  be 
conspicuous  and  valuable  as  a  trade-mark,  while  at  the  same 
time  unobtrusive  and  subordinated  as  a  part  of  the  fabric 
and  its  design. 

As  opposed  to  this  is  the  case  of  the  Firestone  Tire  for 
automobiles,  in  which  case  there  has  been  no  need  for  making 
the  trade-mark  unobtrusive  and  the  word  "Firestone,"  moulded 
in  high  relief  and  many  times  repeated,  has  been  made  to 
serve  the  practical  purpose  of  minimizing  skidding  and  increas- 
ing wearing  qualities  as  well  as  of  identification. 

London  Plumes,  which  are  sold  by  the  London  Feather 
Company,  have  been  ingeniously  trade-marked  by  means  of  a 
small  label  of  celluloid  sewed  inside  the  stem  of  each  ostrich 
plume  in  such  a  way  that  the  plume  will  fall  apart  if  the  label 
is  cut  out. 


378        ADVERTISING  AS  A  BUSINESS  FORCE 

Siegel,  Rothchild  &  Co.  ask  purchasers  in  their  advertising 
to  identify  their  Perfect  Shape  Parasols  by  the  name,  which  is 
inserted  on  the  inside  of  the  ribs. 

Even  coal  is  being  successfully  trade-marked  by  the  City 
Fuel  Company,  of  Chicago.  This  company  has  conceived  a 
City  Fuel  Man,  so-called.  He  is  made  entirely  of  coal  — 
body,  face,  arms,  and  all.  He  is  being  used  in  all  this  com- 
pany's advertising,  and  is  constantly  associated  with  a  guaran- 
tee certificate  which  in  one  case  he  is  signing,  in  another  holding 
up  to  view,  etc.  The  consumer  is  asked  to  insist  upon  getting 
the  guarantee  certificate  of  the  City  Fuel  Man  when  getting 
coal  either  from  the  City  Fuel  Company  direct  or  from  his 
own  dealer. 

Indeed  there  seems  to  be  no  end  to  the  ingenious  methods 
which  are  being  conceived  to  trade-mark  this,  that,  and  the 
other  thing.  We  have  music  trade-marked  by  the  Columbia 
and  Victor  Phonograph  people.  We  have  cartoons  trade- 
marked  with  small  dogs  and  similar  marks  of  the  artist.  There 
are  even  those  who  maintain  that  the  graduates  of  certain 
of  our  universities  are  trade-marked  by  their  walks. 

It  is  not  unreasonable  to  think  that  ere  long  we  will  refuse 
to  eat  a  lamb  chop  unless  it  carries  a  tag  showing  it  is  our 
favorite  brand,  nor  a  slice  of  roast  beef  without  "the  mark 
on  the  selvage."  The  tendency  seems  to  be  toward  so  trade- 
marking  products  that  thej-  will  be  certainly  recognized  whether 
in  or  out  of  their  containers 

In  short,  the  business  world  has  got  to  such  a  stage  that  this 
question  may  well  be  raised:  Just  how  many  trade-marks  can 
the  average  person  be  expected  to  remember,  even  though 
they  may  be  advertised  in  every  publication  and  on  every 
hillside.''  Never  before  were  the  qualities  of  simplicity,  dis- 
tinction, and  appropriateness  so  essential  to  a  successful  trade- 
mark as  now. 

REVIEW   QUESTIONS  —  CHAPTER   XI 

1.  What  are  some  of  the  main  uses  of  the  trade-mark? 

2.  How  can  the  trade-mark  be  used  as  a  weapon  for  oflFence 
or  defence.'' 

3.  What  is  the  use  of  registering  a  trade-mark.^ 

4.  What  are  the  legal  requirements  for  trade-mark  registry.'' 

5.  What  are  the  essentials  of  a  good  trade-mark? 


TRADE-MARK  PROBLEMS  379 

PROBLEM  QUESTIONS  —  CHAPTER  XI 

1.  Do  you  think  it  was  a  good  move  for  the  Rubberset 
Company  to  exploit  dental  cream  under  its  trade-mark? 
What  are  the  best  arguments  for  and  against  doing  this? 

2.  Could  the  trade-mark  plan  employed  by  Renter  &  Co., 
and  Charles  E.  Hires,  in  use  in  connection  with  draught 
beverages,  be  applied  to  other  liquid  products,  for  instance, 
to  petroleum  or  vinegar?  What  would  be  the  defects  in  the 
plan  as  applied  to  those  products?  How  could  it  be  modified 
to  suit? 

3.  As  a  buyer  of  a  ready-made  overcoat  what  form  of  label 
would  give  you  the  strongest  possible  sense  of  confidence  in 
your  purchase?  Suppose  the  maker  of  the  cloth,  the  dyer, 
the  cutter,  the  jobber,  and  the  retailer  each  had  his  label  on 
the  coat  somewhere,  would  they  influence  you  to  choose  that 
coat  in  preference  to  another  exactly  like  it  in  appearance, 
but  bearing  only  the  retailer's  label?  Would  any  of  the  other 
labels  alone  have  more  influence  with  you  than  does  the  retailer's 
label? 


CHAPTER  Xn 

PRICE  MAINTENANCE 

THE  question,  What  is  a  fair  price?  leads  at  once  to  the 
more  complicated  question.  How  is  a  fair  price  to 
be  preserved?  Neither  of  these  questions  can  be 
answered  without  due  regard  for  their  legal  aspects.  And  the 
legal  side  is  only  one  of  many  phases  which  these  questions 
present. 

To  get  the  subject  before  us  in  perfectly  concrete  form, 
suppose  we  look  at  a  list  of  wholesale  and  retail  prices  covering 
articles  some  of  which  are  sold  under  restrictions  as  to  price, 
while  others  are  sold  without  such  restrictions.  This  table 
and  the  discussion  of  it  by  Roy  W.  Johnson  of  the  Printers^  Ink 
staff  will  serve  to  get  the  main  features  clearly  in  mind  as  they 
bear  on  advertising: 

*  Maybe  the  advertising  man  says,  "What  have  I  to  do  witli 
fixing  the  price?     That  belongs  to  the  production  departments. 

Price  ^  J°^  ^^  ^^  ^^^^  ^^^  goods."  And  it  sounds  rea- 
Mainte-    sonable  enough  until  you  begin  to  think  seriously 

nance       about  it. 

and  the        With  some  classes  of  goods  the  price  is  fixed  to  all 

ve  iser  jjj^^gj^^g  ^^^  purposes  by  conditions  outside  the  indi- 
vidual business.  Chewing  gum,  for  example,  is  priced  practically 
uniformly  at  five  cents  a  package  to  the  consumer,  cigars  are 
five  cents  or  ten  cents,  three  for  a  quarter  or  two  for  a  quarter, 
men's  collars  are  fifteen  cents,  two  for  a  quarter,  and  so  on. 
But  these  are  prices  to  the  consumer.  Jobbers'  and  dealers' 
prices  are  not  thus  fixed  by  trade  customs,  and  those  prices 
have  considerable  influence  upon  distribution,  with  which  the 
advertising  man  is  more  and  more  concerned  as  time  goes  on. 

With  yet  another  class  of  goods  the  price  is  "all  the  trafiic 

^Printers"  Ink,  June  27,  1912.  p.  3. 

380 


PRICE  MAINTENANCE  381 

will  bear."  In  other  words,  the  price  is  made  to  fit  the  pur- 
chasing power  of  the  class  of  people  to  be  reached.  These 
goods,  as  a  rule,  are  specialties  which  represent  entirely  new 
inventions,  or  new  combinations  for  special  purposes.  They 
are  sold  mostly  direct  to  the  consumer  through  house  salesmen, 
though  in  some  cases,  like  piano-players  and  phonographs, 
they  are  handled  by  retail  dealers,  or  dealers  and  jobbers. 
But  even  with  goods  of  this  class  the  advertising  man  has  or 
should  have  a  vital  interest  in  the  price.  What  is  the  purchas- 
ing power  of  the  class  to  be  reached.''  Would  a  small  reduction 
in  the  price  bring  the  goods  within  the  purchasing  power  of 
enough  more  people  to  earn  greater  aggregate  profits.''  Would 
a  lower  price  save  enough  selling  expense  to  pay  for  itself.'' 
Those  are  some  questions  —  and  vitally  important  questions, 
too  —  which  the  advertising  man  is  best  fitted  to  answer. 

But  the  great  majority  of  products  are  sold  by  the  jobber- 
retailer  route,  in  competition  with  other  similar  products. 
They  must  meet  the  competition  of  consumer-advertised  goods 
and  goods  which  are  not  advertised  to  the  consumer,  the  com- 
petition of  price-restricted  goods  and  goods  upon  which  the 
price  is  not  maintained.  Each  form  of  competition  has  a  direct 
bearing  upon  distribution,  as  well  as  upon  sales  to  the  consumer, 
and  the  advertising  man  cannot  afford  to  let  somebody  fix 
the  price  on  the  goods  without  considering  those  factors  which 
belong  to  his  province. 

One  very  simple  rule  —  and  as  dangerous  as  it  is  simple  — 

consists   in  taking  the   prices  of   competitors   and   averaging 

them,  or  going  a  bit  below  them.     It  is  dangerous 

„.    ^.     because  the  fact  that  one  man  can  make  something 

jljjg      for  fifteen   cents  is  no  sign  that  another  can  do  it 

for  the  same  money.    Unless  it  is  possible  to  duplicate 

or  improve  upon  the  efficiency  of  rival  organizations  it  is  folly 

to  duplicate  rival  prices.     It  is  the  same  ditch  so  many  printers 

have  fallen  into:  "If  he  can  do  it  for  that,  I  can  do  it  for  less." 

It  certainly  is  necessary  to  compare  prices  of  competitors, 
but  they  are  a  basis  of  comparison  only.  If  it  is  found  that 
a  competitor  can  sell  his  goods  at  a  lower  price  than  they  can 
profitably  be  sold  by  one's  self  under  present  conditions,  it  is 
necessary  to  change  the  condition  before  meeting  the  price; 
that  is,  unless  it  is  possible  to  sell  the  goods  at  a  loss,  and  make 
it  up  on  something  else.  Individual  conditions  must  regulate 
individual  prices;  not  somebody  else's  conditions. 


382        ADVERTISING  AS  A  BUSINESS  FORCE 

The  actual  cost  of  production  is,  of  course,  the  basis  for 

a  price.     But  it  is  only  a  basis.     To  it  must  be  added  the 

.    overhead  —  depreciation  of  equipment,  interest  on  the 

ofPrke    investment,  lighting  and  heating,  insurance,  etc.  — 

and  a  tentative  profit,  the  "profit  we  want  to  make." 

Thus  far  the  board  of  directors  or  the  general  manager  can  safely 

go  by  themselves,  if  they  have  the  figures  of  a  competent  cost 

accountant  as  a  guide.     Though  even  this  basis  is  arbitrary  to 

a  large  extent   it  is  reasonably  accurate.     But  at  that  point 

selling  cost  steps  in,  and  with  it  the  advertising  man. 

Nobody  knows  how  much  it  is  going  to  cost  to  sell  the  goods, 
but  the  advertising  man  should  have  a  clearer  notion  than 
anybody  else.  In  the  aggregate,  selling  cost,  in  advance  of 
actual  sales,  must  be  an  estimate,  but  there  are  certain  fixed 
factors  which  enter  into  it. 

For  example,  it  costs  the  jobber  15  to  20  per  cent,  to 
do  business.  It  costs  the  retailer,  on  the  average,  30 
per  cent.  Those  percentages  represent  definite,  concrete 
amounts  which  must  be  added  to  the  selling  cost  of  every  article 
which  goes  through  jobbers'  and  dealers'  hands.  Some  articles 
are  sold  on  smaller  margins  than  these,  but  they  are  commodities 
which  are  advertised  to  such  an  extent  that  demand  for  them 
is  practically  automatic,  so  that  they  entail  no  selling  effort 
on  the  part  of  the  dealer  or  jobber,  and  the  price  is  strictly 
maintained  so  that  the  dealer  gets  the  full  margin  every  time 
and  does  not  have  to  meet  cut  prices. 

As  an  illustration  of  this  method  of  price  fixing,  Daniel 
Kops,  of  Kops  Bros.,  makers  of  Nemo  corsets,  states  that 
a  profit  of  l]/2  per  cent,  on  the  investment  according  to  in- 
ventory is  considered  by  his  firm  a  good  business.  The  cost 
of  production  of  the  corsets  is  from  sixteen  to  seventeen  dollars 
per  dozen.  The  dealer  (jobbers  do  not  figure  in  these  goods) 
pays  twenty-four  dollars  a  dozen,  and  sells  the  corsets  for  three 
dollars  apiece.  The  comparatively  high  rate  of  dealer  profit 
on  a  widely  advertised  line  is  explained  by  Mr.  Kops  as  being 
necessary  because  the  high  price  of  the  goods  entails  a  certain 
risk  on  the  dealer's  part  for  which  he  must  be  recompensed. 

As  a  general  rule,  the  higher  the  price  of  the  goods  the 
greater  the  dealer's  margin  of  profit,  but  there  are  exceptions. 
The  Gillette  razor  is  one,  which,  selling  for  five  dollars  to  the 
consumer,  brings  the  dealer  only  25  per  cent,  gross  profit,  and 
the  jobber  gets  a  discount  of  but  10  per  cent.,  or  10  and  5  in 


PRICE  MAINTENANCE  *  383 

large  quantity  orders.  The  razor  costs  to  manufacture,  includ- 
ing selling  expense  and  overhead,  approximately  $2.25,  and  the 
jobber  pays  $3.10  for  it.  It  should  be  mentioned,  however, 
that  the  prices  to  the  jobber  are  delivered  prices,  as  the  Gillette 
people  pay  all  carrying  charges. 

The  Ingersoll  dollar  watch  is  sold  to  the  dealer  at  a  discount 
ranging  from  25  to  35  per  cent.  The  cost  of  production  is 
from  fifty  to  fifty-five  cents,  the  jobber  pays  sixty  cents  and 
the  dealer  seventy -five  cents.  Dealers  who  buy  in  large 
quantities  can  get  a  better  price  —  seventy  cents  and  in  some 
cases  sixty-five. 

The  Bissell  carpet  sweeper  costs  $1.50  to  $2.50  to  produce, 
fiome  according  to  style.  The  jobber  makes  a  profit 
Other  of  approximately  $3.50  per  dozen,  and  the  dealer 
Cases      25  to  35  per  cent. 

The  terms  on  which  the  goods  are  sold  have  considerable 
effect  upon  the  dealer's  profits.  For  example,  fifty-cent  hose 
at  $4.15  a  dozen,  terms  1  per  cent,  discount  for  cash  in  ten  days, 
sixty  days  net,  costs  the  dealer  more  than  fifty-cent  hose  at 
$4.25,  6  per  cent.,  \%,  provided  he  discounts  his  bills. 
A  good  many  small  dealers  do  not  realize  the  advantage  of 
getting  the  cash  discount,  though  most  of  the  large  stores 
understand  that  it  represents  an  extra  profit  on  the  goods. 
In  arranging  the  matter  of  terms  the  class  of  retailer  it  is  desired 
to  reach  is  important.  The  small  man  who  is  not  in  the  habit 
of  discounting  his  bills  would  believe  that  the  hose  at  $4.15 
were  actually  cheaper,  and  a  sale  might  be  lost.  As  the  adver- 
tising man  is  to  be  entrusted  with  a  large  share  of  the  task  of 
getting  distribution,  it  is  necessary  that  he  have  some  knowledge 
of  the  subject  of  terms  and  some  voice  in  their  selection. 

Too  high  a  margin  of  profit  for  the  dealer  is  a  direct  encour- 
agement to  cut  the  price.  The  manufacturer  may  say  that  he 
doesn't  care  how  much  the  price  is  cut,  so  long  as  he  gets  his. 
But  he  does  care,  because  it  has  a  very  definite  effect  upon  dis- 
tribution. 

The  Ingersoll  watch,  for  example,  is  sold  in  upward  of 
60,000  stores,  all  over  the  country.  That  includes  a  great  num- 
ber of  very  small  country  stores,  who  handle  the  goods  because 
the  price  is  the  same  everywhere,  and  there  is  no  inducement 
for  their  customers  to  go  to  the  city  for  a  watch.  The  margin 
of  profit  for  these  small  stores  is  not  magnificent,  but  it  is 
absolutely  sure,  and  the  goods  are  so  widely  advertised  and  so 


384        ADVERTISING  AS  A  BUSINESS  FORCE 

well  known  that  a  fifteen-year  old  girl  at  three  dollars  a  week 
can  sell  them  as  well  as  a  high-priced  salesman.  Moreover, 
the  dealer  does  not  have  to  spend  any  of  his  own  money  adver- 
tising them. 

But  let  a  big  store  cut  the  price,  and  inevitably  the  little 
fellow  must  discontinue  the  line.  He  can't  afford  to  carry 
it  unless  he  is  willing  to  meet  the  prices  in  the  other  store. 
By  and  by  distribution  is  concentrated  in  a  few  of  the  larger 
stores,  and  when  they  get  tired  carrying  the  goods  —  as  they 
will,  because  there  is  no  glory  in  selling  goods  for  long  without 
profit  —  the  distribution  is  gone.  Not  only  that,  but  con- 
sumers have  been  educated  to  expect  a  lower  price,  and  that 
handicap  must  be  overcome. 

So  it  doesn't  pay  to  offer  too  much  profit,  unless  one  is  in 
the  position  where  a  cut  price  will  infringe  patent  rights. 

Too   small    a   profit   is   equally   dangerous,  for   the  simple 

reason  that  the  small  dealer  cannot  afford  to  carry  the  goods, 

and  the  big  dealer  and  the  jobber  are  afforded  an 

Dangers  of  excellent  temptation  to  get  out  a  private  brand  in 

ProRt  which  there  will  be  more  profit.  The  advertising  man 
ought  to  know  what  profit  the  dealer  makes,  and 
what  profit  he  ought  to  make,  for  this  reason  if  for  no  other. 
He  doesn't  want  to  be  placed  in  a  position  where  he  is  going 
ahead  creating  demand  for  goods  which  is  being  filled  with 
somebody's  private  brand. 

In  considering  selling  cost,  advertising  expense  cuts  con- 
siderable figure,  and  here  again  the  advertising  man  is  inter- 
ested. It  is  a  mistake,  however,  to  consider  advertising  expense 
as  a  matter  wholly  separate  from  dealer  and  jobber  discounts, 
and  as  something  which  must  be  added  to  the  price.  It  is  part 
of  the  selling  cost  —  true,  but  it  will  not  only  cut  down  the 
cost  of  production  by  increasing  demand,  but  also  make  it 
possible  to  do  business  on  a  smaller  margin  of  profit  to  dealer 
and  jobber. 

Take  the  Big  Ben  alarm  clock,  for  example.  It  sells  to  the 
retailer  for  $1.50  and  to  the  consumer  for  $2.50.  It  is  nationally 
advertised.  Another  alarm  clock,  very  similar  in  appearance, 
which  sells  to  the  consumer  at  the  same  price,  is  sold  to  the 
retailer  at  $1.30.  It  is  not  advertised  nationally,  hence  it  is 
necessary  to  give  the  retailer  a  bigger  margin  to  allow  him  to 
advertise  it  himself  in  his  local  papers,  and  to  cover  the  greater 
effort  necessary  to  sell  it.     Twenty  cents  per  clock  would  do 


PRICE  MAINTENANCE  385 

a  lot  of  national  advertising,  and  leave  a  tidy  sum  to 
go  into  profits.  Indeed  in  many  lines  the  saving  which  may  be 
effected  right  there  will  more  than  pay  for  the  advertising 
done. 

And  it  does  not  "come  out  of"  the  dealer,  either.  J.  P. 
Archibald,  a  member  of  the  executive  committee  of  the  Pennsyl- 
vania Retail  Jewelers'  Association,  speaking  for  the  retailers, 
says:  "We  favor  the  fixed  price  on  all  standard  goods.  We 
can  reduce  the  cost  of  doing  business  very  materially  by  selling 
price-fixed  goods.  A  boy  or  girl  at  a  salary  of  $3  or  $4  a  week 
can  sell  advertised,  fixed-price  goods  as  well  as  the  high-priced 
salesman,  thus  the  retailer  reduces  his  cost  of  doing  business. 
Moreover,  it  is  not  necessary  for  the  retailer  himself  to  advertise 
goods  which  are  nationally  advertised." 

Another  instance  in  which  an  advertising  "expense"  proved 
an  actual  saving  is  that  of  the  Dover  Manufacturing  Company, 
of  Canal  Dover,  Ohio,  makers  of  asbestos  sad-irons.  When 
the  asbestos  iron  was  first  put  on  the  market  it  was  priced 
high  in  order  to  give  the  dealer  a  good  margin  of  profit.  It  was 
not  nationally  advertised,  and  some  dealers  pushed  the  goods, 
making  an  exorbitant  profit,  while  others  cut  the  price.  Many 
did  not  carry  the  line  at  all  because  of  the  price  cutters.  Later 
the  average  price  at  which  the  irons  were  being  sold  was  taken 
as  the  price  to  be  maintained  —  it  was  considerably  lower  than 
the  original  price  —  and  advertised  to  the  consumer.  Distribu- 
tion was  immediately  strengthened,  and  while  some  dealers 
made  less  profit  per  set  on  the  irons  they  made  more  money 
in  the  end  because  it  cost  less  to  sell  them.  Moreover, 
dealers  who  never  would  touch  the  goods  before  now  took 
them  on,  because  the  price  was  protected.  The  resulting 
increase  in  sales  more  than  offset  the  advertising  expense,  even 
though  it  meant  an  (apparent)  reduction  in  the  dealer's 
profits. 

Another  instance,  which  is  familiar  to  everybody.  The 
retail  dealer  makes  from  50  to  100  per  cent,  gross  profit  on 
the  old-style,  open-blade  razor.  He  makes  only  25  per  cent, 
on  the  Gillette.  If  the  Gillette  were  not  advertised,  the 
retailer  wouldn't  touch  it  at  a  less  margin  than  he  is  allowed 
on  other  razors  which  are  not  advertised.  The  difference 
between  25  and  50  per  cent,  on  an  investment  of  $3.75  (the 
amount  the  dealer  pays  for  the  Gillette  razor)  will  pay  for 
a  good  deal  of  advertising.     There  is,  moreover,  the  jobber 


386        ADVERTISING  AS  A  BUSINESS  FORCE 

to  consider.     He  could  hardly  be  expected  to  handle  an  un- 
advertised  article  on  a  10  per  cent,  margin! 

The  table  of  prices  based  upon  data  collected  by  William 
H.  Ingersoll,  of  Robert  H.  Ingersoll  &  Brother,  is  suggestive. 
It  is  interesting  to  note  the  dealers'  profits  on  the  un- 
advertised  articles  as  compared  with  that  on  the  advertised 
goods.  There  seems  to  be  some  ground  for  the  conclusion 
that  the  man  who  will  not  advertise  is  paying  for  it  just 
the  same : 

Table  of  Prices  on  Articles  Sold  With  and  Without 
Price  Maintenance 

Bepresentative  list  of  goods  sold  by  various  lines  of  retail  stores,  some  of  ichich 
have  the  resale  price  restricted  and  some  unrestricted.  Arranged  to  show  the 
comparative  profits  on  the  restricted  and  unrestricted  articles  as  they  are  sold 
ordinarily  by  the  average  stores  throughout  the  country.  The  percentage  of 
profit  given  are  only  approximate,  since  the  terms  on  ichich  the  goods  are 
sold  vary  from  time  to  time,  and  in  different  sections  of  the  country.  Most 
manufacturers  allow  a  cash  discount  off  the  invoice  prices  here  given. 

RESTRICTED  UNRESTRICTED 

Food  Products  Price        Con-     Approx.     Price       Con-    Approx. 

paid  by  sumers'  per  cent,  paid  by  sumers'  per  cent. 
Articles  retailer    price       profit      retailer     price      profit 

Beech  Nut  Bacon  (per  jar)        .25  .30  16f        

Beech  Nut  Beef  (per  jar).. .        .25  .30  16|        

Beech  Nut  Peanut  Butter. .        .20  .25  20  

Beech  Nut  Chewing  Gum  .       .03  .05  40         

Mother's  Oats (18  packages  $1.45)  .081         .10  19 

Franco- Amer.  Soup,  tomato : 

I  pint 075         .10  25 

Pints 14J         .18  21 

Quarts 25  .30  16f 

Franco-Amer.  Plum    Pud- 
ding No.  1  size 25  .30  16| 

Campbell's  Soups (1  doz.  81  cents)  .067         .10  33 

Kellogg's  Corn  Flakes    ...        (36  to  a  case  $2.80)  

.077         .10  23  

Kellogg's  Rice  Flakes 076         .10  24         

PostToasties  (2  doz.  at  $2.80)  .117         .15  23^ 

Maple  Wheat  Flakes (36  packages  for  $2.80)       .077         .10  23 

CoflFee 21  .28  25 

Coffee  out  of  another  bin 21  .30  30 

Coffee  out  of  another  bin 21  .35  40 

Cinnamon 28  .60  53J 

Brighton  Salt,  3  ft.  bag  .  .        (100  bags  in  a  barrel)          .037         .05  26 

Brighton  Salt,  2^  ft.  bag    .       (115  bags  in  a  barrel  $3.75)  .033         .05  34 

Crosse  &  Blackwcll's  Pickles     (i  pint  dozen  $2.10               .175         .25  30 

Worcestershire  sauce 141         .25  43? 


PRICE  MAINTENANCE  387 

RESTRICTED  UNRESTRICTED 

Food  Products — Corit.  Price         Con-      Approx.    Price        Con-      Approx. 

paid  by  sumers'  per  cent,  paid  by  sumers"  per  cent. 
Ai'ticles  retailer     price        profit      retailer     price     profit 

Royal  Baking  Powder 071         .10  29 

Royal  Baking  Powder,  1  lb. 

size 387         .60  35| 

Another     baking    powder, 

similar  formula    (doz.  cans  $3.75) 

Dutch  Hand  Soap (48  lOc.pkg.in  case  $3.40)  .07 

Dutch  Hand  Soap,  smaller 

Fels-Naptha   Soap  (100  in  box,  $4.00) 

West  of  Mississippi  deal- 
er's      price     is    slightly 

higher. 
Can  Corn,  10c.  straight.  .  .  .        (dozen  80c.) 

Premier  Brand  Corn 

Premier  Pineapple  No.  2 

Premier       Lemon       Cling 

Peaches  No.  2| 

Tea    

Toastettes,   No.   2  size   (2 

doz.  to  the  case) 

Cracker  Jack (100  packages  $3.25) 

Huyler's  Triscuit (doz.  10c.  pack.  88c.) 

Walter  Baker's  Cocoa,  i  lb. 

tin (6  lb.  to  box) 

Walter  Baker's  Chocolate, 

f  lb (24^  lb.  to  the  case) 

Hershey's  Milk  Chocolate  (48  5c.  pack.  $1 .60) 

Continental  Sardines    ....        (1  doz.  to  case) 

Salada  Tea,  j  lb 

Postum  Cereal  No.  1    (24  to  case  $2.70) 

Jello (3  doz.  to  case  $2.70) 

Snider's  Catsup,  ^  pt (New  York  City  prices) 


Wearing  Apparel 

Beacon  Shoe 2.25         3.00  25 

Beacon  Shoe 

Beacon  Shoe 

Cross  Gloves    

Cross  Gloves    

Warner's  Rust  Proof  Corsets 

Warner's  Rust  Proof  Corsets 

Silver  Brand  Collars 

Silver  Brand  Shirts 

Ide  Brand  Shirts 

Ide  Brand  Shirts 1  12§       1.50  25 


.312 

.60 

48 

.07 

.10 

30 

.038 

.05 

24 

.04 

.05 

20 

.067 

.10 

33 

.096 

.15 

36 

.167 

.25 

33i 

.25 

.35 

28| 

.50 

.75 

33A 

.104 

.15 

30| 

.0325 

.05 

37 

.073 

.10 

27 

.18 

.27 

331 

.14 

.20 

30 

.033 

.05 

34 

.07 

.10 

30 

.45 

.60 

25 

.112 

.15 

251 

.075 

.10 

25 

.104 

.12-.15 

13|-17i 

2.60 

3.50 

255 

2.85 

4.00 

28| 

1.18 

1.50 

2U 

1.24 

2.00 

38 

.71 

1.00 

29 

1.00 

1.50 

33^ 

.09 

.12i 

28 

.75 

1.00 

25 

1.04 

1.50 

30t 

388        ADVERTISING  AS  A  BUSINESS  FORCE 


Wearing  Apparel — Cont. 
Articles 


RESTRICTED 

Price  Con-  Appros. 
paid  by  sumers'  per  cent, 
retailer    price       profit 


TTXRESTRICTED 

Price  Con-  Approx- 
paid  by  sumers'  per  cent, 
retailer    price       profit 


Ide  Brand  Shirts 

1.37§ 
.35§ 

2.00 
.50 

SI 

President  Suspenders 

29 

Neckwear 

.37i 
.33^ 
.15 
71 

.50 

.50 

.25 

1  00 

95 

Paris  Garters   

SS 

Paris  Garters 

40 

Pajamas 

90 

N.  B.  Umbrellas 

.75 

1.00 

25 

B.  B.  Bathrobe 

2.50 

3.50 

28; 

Monarch  Belts 

.35 

.371 

.18 

.50 
.75 
.25 

SO 

Monarch  Belts 

'JO 

Onyx  Hosiery 

28 

Onyx  Hosiery 

.23i 

.35 

SS 

Merode  Underwear 

.35^ 

.50 

29 

Merode  Underwear 



.70 

1.00 

30 

Hardware: 

Gem  Jr.  Razor 

.75 

1.00 

25 

Carborundum  Stones 

.75 

1.25 

40 

Ever-Ready  Razor 

.75 

1.00 

25 

Moore  Push  Pins. .  . 

.75doz 
1.50 

.1.20doz. 
2.25 

37§ 
33f 

.... 

Asbestos  Sad-irons  No.  1.50 

Asbestos  Sad-irons  No.  80.. 

1.00 

1.50 

33i 

No.  3  Stanley  Plane 

1.00 

1.36 

26 

Starrett  Caliper 

.48 

.64 

25 

Starrett  Micrometer 

4.05 

5.00 

19 

50  ft.  Steel  Tape  Measure. 

1.87 

2.62 

28 

Cotton  Waste 

.07^ 

.081 

14 

Dodge  Pulley 

4.32 

5.70 

24 

No.  14  Stillson  Wrench  . .  . 

.57 

.81 

30 

No.  3  Blount  Door  Check 

3.00 

3.75 

20 

1  in.  Manila  Rope 

.071 

.12 

37 

Phila.  Lawn  Mower 

4.00 

6.00 

33 

Rubberset  Brushes 

1.00 

1.50 

33 

Atlanta  Wash  Boilers  .... 

1.00 

1.50 

33 

Three-in-One  Oil   

.15 

.25 

40 

Major's  Cement 



.10 

.15 

33 

Liquid  \'eneer 

.331 

.50 

33 

Jap-a-lac 

.27 

.45 

40 

Yale  Night  Latch 

.92 

1.25 

27 

Yale  Locks  

1.00 
.06 

1.35 
.10 

9S 

Welsbach  Mantles 

40 

Welsbach  Mantles 

.09 

.15 

40 

Welsbach  Mantles 

.18 
.08 

.30 
.10 

40 

Le  Page's  Glue 

20 

Le  Page's  Glue 

.15 

.20 

25 

Le  Page's  Glue 

.12 

.15 

20 

Le  Page's  Glue 

.20 

.25 

20 

PRICE  MAINTENANCE 


389 


RESTRICTED 

Price      Con-      Approx- 
Statdonery:  paid  by  sumers'   per  cent, 

retailer     price      profit 

Venus  Pencils 

E.  Faber  Mongul 

Spencerian  Pens 

Stafford  Ink 

(In  the  West  the  price  of 

ink  per  quart  is  usually 

75c.) 
Simplex  Pencil  Sharpener  ..       .06  .10  40 

Alexis  Bond 

Alexis  Ledger 

Stratford  Cover 

Y.  &  E.  Cabinets 2.10        3.00  30 


UNRESTRICTED 

Price  Con-  Approx- 
paid  by  sumers'  per  cent, 
retailer    price      profit 

.051  .10  45 

.04  .05  20 

.72gr.  1.00  28 

.42qt.  .60  30 


.15 

.15i 
3.75 


.19 
.19i 
5.00 


21 
21 
25 


Sporting  Goods: 


Spalding  League  Ball 1.00 

Peck  &  Snyder  Skates 40 

Smith  &  Wesson  Revolver.  13.00 

3  A.  Kodak 13.33 

Kodak  Films 13^ 

W.  &  D.  Tennis  Ball    . 

W.  &  D.  Tennis  Racket  .  .     6.00 

Edison  Phonograph 10.50 

Columbia  Graphophone   ..   15.00 
Iver-Johnson  Revolver  .  .  .     4.00 

Gillette  Razor 3.75 

Seed  Dry  Plates - 

Stanley  Plates 

Photo  Albums 

Stereopticons 

C.  C.  Tennis  Ball 

Tennis  Racket 

Eureka  Golf  Ball 

Ansco  Cameras  No.  1 

Cyko  Paper 

Ansco  Films 

Union  Hardward  Skates 

Electric  Flash  Light 

Fishing  Rods 

Thermos  Bottles 1.50 

Keen  Kutter  Knives    4.00 

Keen  Kutter  Camp  Axe 

Klaxon  Warning  Signal    . .   26.25 

Kiaxonet 15.00 

Ingersoll  Watch 75 


1.25 

.75 

15.50 

20.00 

.20 

4.25doz.  5.00 

8.00 

15.00 

25.00 

6.00 

5.00 


20 

46| 

16 

33| 

321 

15 

25 

30 

40 

33i 

25 


.80doz.  1.10 

.50  .55 

.50  .85 

39.00       65.00 

l.SOdoz.  3.60 


2.00 
6.00 


25 
331 


4.25 
.15 

3.34 
.20 
.15 

1.00 
.21 


.33 


7.00 
.35 

5.00 
.30 
.20 

1.25 
.30 

1.25 


.50 


35.00 

25 

20,00 

25 

1.00 

25 

27 
9 
41 
40 
50 
39 
57 
33 
33i 
25 
20 
30 
32 


34 


390 


ADVERTISING  AS  A  BUSINESS  FORCE 


Drugs 


RESTRICTED  UNRESTRICTED 

Price  Con-  Approx.  Price  Con-  Approx. 
paid  by  sumers'  per  cent,  paid  b\'  sumers'  per  cent, 
retailer     price      profit      retailer     price     profit 


.66 
.70 


Alcohol  Stove 

Sanatogen 75 

Miles'  Medicine 66 

Vinol 

Williams'  Sha\'ing  Stick 

Jersey  Cream  Soap 

Prophylactic  Tooth  Brush..       .164 

De  Wilbus  Atomizer 

Sanitax  Brushes 

Eskay's  Food 

(Large  size  —  list  price 
75  cents,  but  sold  in  some 
places  as  low  as  60  cents.) 

In  dozen  lots 

$12  worth  at  a  time 

$25  worth  at  a  time 

Palmolive  Soap 

Hot  Water  Bottles 1.00 

Fountain  Syringes 1.00 

Ice  Bags 90 

Lyon's  Toothpowder 

Belladonna  Plasters 

Inf.  Syringes 37^ 

Box  Paper    


1.00 
1.00 


.25 
1.00 
1.00 


.50 


25 
34 


34 
34 
30 


1.50  33^ 

1.50  33| 

1.35  33^ 


25 


33^ 


.50 


.30 


.50 


33i 


.70 

1.00 

30 

.16 

.25 

36 

11 

.15 

26i 

.541 

.60-.75 

10-28 

.467 

.60-.75 

22-38 

.454 

.60-.75 

24J-40 

.07 

.10 

27 

.15* 

.25 

38 

.08i 

.15 

m 

40 


PRICE   MAINTENANCE   AT   THE   PATENT   HEARING 


During  the  spring  of  1912  the  Patents  Committee  of  the 
House  of  Representatives  held  hearings  in  Washington  on 
various  questions  involved  in  a  proposed  recodification  of 
the  United  States  patent  laws.  One  of  the  features  discussed 
was  the  extent  to  which  a  patent  carried  the  right  of  price  control. 
The  "Dick  case"  decision  made  this  section  of  the  committee's 
hearings  one  of  the  most  spirited  parts  of  its  work.  That 
decision  had  confirmed  the  right  of  the  seller  of  a  patented 
article  to  a  degree  of  control  over  it  after  sale.  This  made 
the  committee  particularly  eager  to  get  from  manufacturers 
definite  statements  of  their  views  on  price  maintenance.  As 
a  result  some  new  experience  records  were  made  public. 


PRICE  MAINTENANCE  391 

*0f  the  business  men  who  have  appeared  before  the  House 
Committee  in  Washington  at  its  hearings  on  the  proposed 
new  patent  legislation  none  has  made  a  more  favorable  impres- 
sion than  William  H.  Ingersoll,  of  the  firm  of  R.  H.  Ingersoll 
&  Bro.,  of  New  York,  watch  manufacturers.  It  was  intimated 
to  Mr.  Ingersoll  in  the  course  of  his  testimony  that  he  had 
made  out  a  pretty  good  case  and  members  of  the  committee 
said  more  to  the  same  purport  in  private  conversation  following 
the  hearing.  Mr.  Ingersoll  had  to  stand  the  rather  severe 
cross-examination  that  has  been  the  fate  of  almost  every 
manufacturer  who  has  appeared  before  the  committee  and  he 
found  the  committee  characteristically  inquisitive  regarding 
the  business  secrets  of  the  firm.  In  answer  to  questions  he 
stated  that  the  dollar  watch  costs  between  50  and  55  cents 
to  produce  —  a  little  more  than  formerly  owing  to  the  increased 
cost  of  material  —  and  that  the  retail  outlet  embraces  some- 
where between  60,000  and  100,000  stores. 

Conversation  on  the  part  of  your  correspondent  with  members 
of  the  committee  following  the  appearance  of  Mr.  Ingersoll 
disclosed  the  fact  that  there  was  one  feature  of  his  testimony 
which  has  aroused  the  deepest  interest  as  seemingly  significant 
of  the  business  policy  of  the  future  —  a  straw,  as  it  were, 
that  shows  the  trend  of  the  trade  wind.  This  disclosure  was 
the  testimony  of  Mr.  Ingersoll  that  whereas  his  firm  markets 
its  dollar  watch,  a  long-time,  standard  article,  on  the  old  sliding 
scale  of  discounts  whereby  the  small  retailer  has  to  pay  75 
cents,  whereas,  the  big  retailer  who  buys  in  quantity  can  get 
a  price  as  low  as  65  cents,  it  has,  in  placing  on  the  market  its 
newer  products,  adopted  an  absolutely  uniform  price  policy. 
The  instance  in  point,  that  particularly  impressed  the  committee 
as  cited  by  Mr.  Ingersoll,  was  the  method  employed  in  the 
distribution  of  the  watch  that  retails  at  $25.  Here  the  jobber 
is  virtually  eliminated  and  the  watch  is  supplied  to  the  retailer 
at  $16.67  net  —  an  absolutely  net  price  that  is  universal  in 
application  no  matter  whether  the  retailer  buys  one  watch 
or  a  thousand. 

Charles  T.  Johnson,  president  of  the  Dover  Manufacturing 
Company,  of  Canal  Dover,  Ohio,  in  the  course  of  testimony 
before  the  committee  outlined  step  by  step  the  evolution  of 
sad-iron  manufacture  as  developed  by  his  concern  which  now 


*Pnnters   Ink,  May  30,  1912,  p.  40. 


392        ADVERTISING  AS  A  BUSINESS  FORCE 

ranks  as  the  largest  exclusive  sad-iron  concern  in  the  world. 
He  told  how,  looking  about  for  a  business  opening,  he  had 
been  impelled,  fifteen  years  ago,  to  enter  upon  his  present  line 
because  he  became  convinced  that  the  sad-iron  was  something 
that  needed  evolution  and  improvement.  Sad-irons  as  a 
commodity  had  so  degenerated  that  irons  which  had  once 
sold  for  prices  ranging  from  $2  to  $5  per  set  were  selling,  full 
nickel-plated,  at  50  cents  per  set  and  42  to  45  cents  on  sale 
days  in  the  Chicago  department  stores.  Thereupon  he  con- 
ceived the  idea  of  bringing  out  a  good,  modern  sad-iron. 

It  took  him  six  years  to  get  his  original  basic  patent,  and 
that  patent,  thanks  to  official  red  tape,  etc.,  cost  between 
$2,000  and  $3,000.  This  was  the  "Asbestos  sad-iron."  Some 
years  ago,  in  response  to  popular  demand,  the  concern  grappled 
with  the  problem  of  the  self-heating  iron,  and  after  five  years 
of  experimenting  brought  out  the  "A-Best-0  automatic, 
heat-controlled  electric  iron."  These  latter  retail  at  $6,50 
and  are  sold  to  the  trade  at  27|  and  30  per  cent,  off,  the  former 
ciuotation  for  lots  of  one  dozen  or  more.  The  retail  price  is 
fixed  under  the  usual  license  plan.  A  representative  model  of 
the  asbestos  sad-irons  retail  at  $1.75  per  set  and  the  extreme 
jobber's  price  is  $11.67  per  dozen,  while  the  price  to  the  retailer 
is  $14.40  per  dozen.  There  is  a  provision  in  the  jobber's 
agreement  under  which  they  agree  not  to  quote  or  sell  catalogue 
house  or  department  store  trade. 

Asked  how  he  came  to  adopt  the  fixed-price  policy,  Mr. 
Johnson  said:  "In  the  early  stage  in  putting  out  goods  on 
the  market,  they  were  looked  upon  as  high-priced,  compared 
with  other  commodities  of  the  same  type  which  already 
dominated  the  market.  After  a  term  of  years  we  found  that 
certain  merchants  were  selling  our  goods  at  or  below  cost, 
whereas  others  were  making  a  reasonable  profit.  Upon  investi- 
gating matters  we  found  that  the  dealers  who  were  getting 
a  reasonable  profit  on  the  goods  were  meeting  with  a  ready 
sale,  whereas  those  who  were  selling  them  at  or  about  their 
cost  considered  them  dead  stock  and  were  having  a  hard  time 
to  dispose  of  them  at  any  price. 

"This  not  alone  confused,  but  had  a  tendency  to  discourage 
the  dealer  who  was  really  distributing  the  goods.  We  arrived 
at  the  fixed  price  by  adopting  the  average  price  at  which  the 
successful  merchants  were  selling  the  goods  and  found  that 
this  gave  them  a  reasonable  profit.     Some  of  the  most  successful 


PRICE  MAINTENANCE  393 

merchants  were  getting  considerably  more.  Our  object  in 
adopting  the  fixed  price  was  to  protect  the  successful  distributor 
and  to  protect  the  product  from  being  demoralized  in  price 
so  that  we  could  continue  to  make  high-grade  article.  A  fixed 
price  means  many  added  burdens  to  the  manufacturer,  as  we 
protect  the  dealer  in  his  profits  without  getting  any  additional 
price  from  him.  At  least  that  is  the  way  it  has  worked  out  in 
our  case.  After  adopting  the  fixed  price,  we  found  that  it 
was  obligatory  on  our  part  to  take  back  any  goods  which  had 
become  damaged  in  any  way,  shopworn,  or  which  a  merchant 
said  he  could  not  sell  at  the  fixed  price." 

In  response  to  questions  from  the  chairman  of  the  com- 
mittee the  sad-iron  manufacturer  and  that,  after  deducting  all 

expenses,   including  advertising,  the  manufacturer's 

w^If     net    profit  on  the   asbestos  irons   averages   5   to   8 

Figures    cents  per  set.     He  declared  that  his  company  has 

already  expended  several  times  its  capital  stock  of 
$250,000  in  advertising  and  selling  expense.  The  annual 
output  of  irons  by  the  Ohio  concern  was  given  as  between 
300,000  and  500,000,  and  it  was  stated  that  the  company  has 
paid  6  per  cent,  cash  dividends  and  7  or  8  per  cent,  stock 
dividends,  say,  an  average  of  12  to  15  per  cent.,  annually 
since  the  company  was  organized. 

Mr.  Johnson  was  especially  interesting  when  he  took  the 
ground  that  there  are  few  commodities  with  which  you  can 
go  to  the  consumer  direct,  and  that  if  you  withdraw  support 
from  either  the  jobber  or  retailer,  or  both,  you  might  almost 
as  well  discontinue  manufacturing.  While  on  this  topic,  he 
pointed  out  the  advantages  of  "quality  goods"  and  said: 
"Beginning  in  the  seventies  with  the  advent  of  the  depart- 
ment store  and  catalogue  house  and  ending  with  the  nineties, 

we  had,  in  this  country,  what  might  be  termed  a 
The  His-  '  price  market. '  That  is,  quality  was  sacrificed  to 
°'^Pnce  *^  Pi'ice  and  the  cry  of  the  retailer  as  well  as  the  jobber 
Market    was  for  something  cheap,  cheaper,  cheapest,  and  it 

was  a  hard  matter  to  get  a  good  article,  even  though 
you  were  willing  to  pay  for  it,  as  the  dealers  did  not  dare  to 
carry  them  for  fear  they  would  be  called  '  high-priced. '  Begin- 
ning in  the  nineties,  there  developed  what  might  be  called 
a  'quality  market,'  and  this  has  made  rapid  strides.  In  fact, 
the  major  portion  of  the  consuming  public  now  demands 
quality  and  does  not  haggle  on  price." 


394        ADVERTISING  AS  A  BUSINESS  FORCE 

The  sad-iron  manufacturer  dwelt  at  some  length  upon  the 
experience  of  his  firm  with  the  Fair,  of  Chicago.  At  the  outset, 
dealings  with  the  Chicago  store  allowed  the  store  a  profit  of 
40  per  cent,  and  the  manufacturer  paid  the  expense  of  the 
demonstrator  installed  at  the  store.  Then  the  Fair  declined 
to  purchase  any  more  goods  unless  they  were  granted  the  jobbers' 
prices.  The  manufacturer  offered  them  50  per  cent.,  but  this 
was  not  satisfactory,  and  to  bring  him  to  time  the  Fair  adver- 
tised and  sold  the  goods  at  a  cut  price.  Later  a  truce  was 
effected,  but  after  a  year  or  so  the  same  trouble  was  precipitated 
and  continued  until  the  sad-iron  manufacturers  sued  the  Fair 
and  won  its  suits.  In  conclusion,  Mr.  Johnson  said:  "I 
am  convinced  that  the  Fair  buys  many  of  their  goods  at  less 
than  the  extreme  jobbers'  price,  as  they  are  in  a  position  to 
demoralize  the  market  on  almost  any  well-known  commodity 
unless  the  manufacturer  satisfies  them.  A  profit  of  50  per  cent, 
on  the  average  commodity  does  not  appeal  to  the  average 
department  store.  I  understand  that  many  of  them  have  a  rule 
not  to  advertise  an  article  which  does  not  pay  them  60  per  cent, 
or  better,  unless  the  advertising  is  done  to  attract  people  to 
their  store,  when  the  article  will  be  sold  for  considerable  less 
than  cost." 

In  marked  contrast,  naturally,  to  the  views  of  Mr.  Johnson, 
were  those  of  Walter  H.  Chamberlin,  a  Chicago  attorney,  who 
appeared  on  behalf  of  the  Fair,  Siegel-Cooper  Co.,  Rothschild 
Co.,  the  Boston  Store  and  Hillman's  —  all  department  stores 
located  in  Chicago.  He  was,  of  course,  against  price  mainte- 
nance and  the  burden  of  his  plaint  was  that  the  actions  for 
infringement  started  by  manufacturei"s  to  protect  and  enforce 
their  resale  prices  were,  as  he  put  it,  "fake"  suits  and  that 
there  was  not  enough  involved  in  any  particular  suit  to  warrant 
a  department  store  in  expending  from  $5,000  to  $15,000  to 
contest  the  case.  His  plea  was  that  a  manufacturer  is  entitled 
to  only  so  much  protection  as  a  valid  contract  gives  him  and  not 
to  any  protection  in  his  retail  prices,  and  on  the  score  of  patent 
infringement.  This,  it  may  be  added,  is  a  view  of  the  situation 
which  seems  to  find  favor  with  some  of  the  more  radical  members 
of  the  Patent  Committee.     .     .     . 

The  concern  of  the  retailers  of  the  coimtry  for  a  continuance 
of  the  practice  of  price  maintenance  has  been  voiced  by  several 
witnesses,  prominent  among  the  number  being  John  M.  Roberts, 
president,  and  J.  P.  Archibald,  member  of  the  executive  board 


PRICE  MAINTENANCE  395 

of  the  Pennsylvania  Retail  Jewelers'  Association.  The  latter 
brought  out  the  fact  that  the  retailers  are  partial  to  the  well- 
known,  price-protected  articles,  even  though  the  margin  of 
profit  be  narrower,  because  of  the  fact  that  such  articles  reduce 
the  retailer's  advertising  expenses.  Said  he:  "We  consider 
it  a  great  advantage  to  handle  those  goods  that  are  nationally 
advertised.  We  retail  jewelers  have  to  spend  money  adver- 
tising our  goods  that  are  not  nationally  advertised.  We  do  not 
have  to  spend  money  advertising  goods  like  the  Big  Ben  alarm 
clock.  I  never  put  it  in  my  local  advertising  because  every- 
body knows  it  so  well." 

Mr.  Noyes,  president  of  the  Oneida  Community,  told,  in 
the  course  of  his  testimony  before  the  Committee,  of  his  conver- 
sation with  a  groceryman  who  said:  "We  have  got  to  get 
15  to  18  per  cent,  on  most  of  the  articles  that  we  handle  in 
order  to  make  anything  at  all,  but  I  would  be  tickled  to  death 
to  take  every  one  of  the  standard,  established  lines  —  we  will 
say  Quaker  Oats  and  that  class  of  goods  —  and  do  the  business 
for  8  per  cent,  and  make  more  than  I  can  now  with  a  15  per 
cent,  margin  on  goods  I  have  to  talk." 

Having  thus  presented  some  of  the  main  features  of  the 
questions  which  are  intimately  allied  with  price  maintenance 
we  shall  divide  our  discussion  of  the  subject  into  four  main 
sections : 

1.  Some  arguments  for  price  maintenance  by  those  who  have 
adopted  the  policy. 

2.  Some  arguments  against  price  maintenance  by  those 
who  are  opposed  to  it. 

3.  Some  of  the  legal  aspects  of  the  policy. 

4.  Some  methods  employed  in  maintaining  prices  and  some 
of  the  results  secured. 

ABGUMENTS   FOR   PRICE   MAINTENANCE 

The  Kellogg  Toasted  Corn  Flake  Company,  of  Battle 
Creek,  Mich.,  has  already  been  mentioned  in  various  places  as 
an  advocate  not  only  of  price  maintenance  but  of  its  corollary, 
the  no-quantity  price  —  that  is,  the  principle  of  maintaining 


396        ADVERTISING  AS  A  BUSINESS  FORCE 

one  price,  without  regard  to  the  volume  of  the  purchase.  This 
concern  through  R.  O.  Eastman,  its  advertising  manager, 
has  made  pubhc  the  result  of  a  census  of  dealers  taken  with 
a  view  to  ascertaining  how  many  favored  the  price  maintenance 
policy.     Mr.  Eastman  writes  of  these  results  as  follows : 

*"  Ninety-nine  and  i*^  per  cent. "  in  favor  of  price  protection. 

That's  the  attitude  of  the  dealers  handling  Kellogg's  Toasted 
Corn  Flakes,  if  the  vote  which  we  have  taken  may  be  accepted 
as  a  criterion. 

At  the  request  of  Printers'  Ink  I  have  just  made  a  count 
of  the  ballots  received  on  what  might  be  termed  a  "straw 
vote"  taken  bj^  this  company.  The  votes  referred  to  were 
in  the  form  of  coupons  taken  from  a  circular  which  was  placed 
for  a  time  in  the  cases  as  they  left  our  factory.  We  received, 
all  told,  1 ,405  votes  from  every  state  in  the  Union  with  the 
exception  of  Nevada,  ranging  from  two  in  Delaware  and  Alaska 
to  137  in  New  York  and  146  in  Michigan.  We  received  1,397 
favorable  votes  and  only  eight  against  the  protected  price, 
a  little  more  than  one-half  of  1  per  cent. 

Besides  these  ballots,  we  received  a  great  many  letters  from 
merchants,  expressing  their  views  on  the  subject  more  or  less 
emphatically.  Here  are  a  few  of  the  letters  taken  almost  at 
random  and  representing  widely  scattered  sections  of  the 
country. 

Thode   Bros.,   of   San   Francisco,    Cal.:     "We    do   not    cut 

anything,  and  we  protect  prices  wherever  we  can.     Your  firm 

made  a  good  move   when    they   fought    Weinstein. 

9  r^^^   I  see  them  cutting  on  Royal  Baking  Powder.     It's 

'jlet(nlers   time  for  ihem  to  wake  up  and  start  something  in 

the    protecting    line.      We   have    turned   customers 

away  because  we  wouldn't  sell  an  article  three  for  twenty-five 

cents."     .     .     . 

Wright  &  Weatherly,  of  Osage,  la.:  "Replying  to  your 
circular,  we  wish  to  say  that  we  think  that  the  protected  price 
is  tiie  proper  thing,  inasmuch  as  there  are  so  many  people  in 
business  who  do  not  even  know  they  are  losing  while  others 
do  so  to  draw  business,  as  they  think,  but  do  not  seem  to  have 
sense  enough  to  see  that  if  they  cut  the  price  the  others  will  be 

*Printers   Ink,  March  11,  1912,  p.  60. 


PRICE  MAINTENANCE  397 

forced  to  do  the  same,  and  they  have  gained  nothing,  but  have 
spoiled  the  profit  for  themselves  and  every  one  else.  Therefore, 
the  merchant  seeks  to  find  more  attractive  profits  in  some  other 
brands  which  have  not  been  cut.  You  can  count  our  vote  as 
decidedly  YES." 

H.  H.  Hill,  of  x\llright,  111.:  "We  wish  to  say  that  we  are 
strongly  in  favor  of  the  protected  price  on  everything,  as  that 
is  the  only  way  that  the  small  dealer  can  survive  his  price- 
cutting  competitor  who  has  the  capital  to  buy  in  quantity  lots 
and  get  the  benefit  of  the  free  goods  many  concerns  are  offering. 
The  reason  that  we  are  handling  your  products  is  that  no  one 
in  the  county  is  buying  them  on  free  deals  and  cutting  the  price. 
As  soon  as  some  one  goes  to  cutting  the  price  on  goods  of  this 
kind  we  quit  handling  it  if  possible.  We  only  wish  we  werfe 
as  well  protected  on  other  staples  as  we  are  on  Kellogg's  Corn 
Flakes." 

J.  L.  Anderson,  of  Galena,  Kan.:  "As  to  the  enclosed 
ballot,  will  say  I  have  three  different  articles  in  my  store  selling 
under  the  protected  price  plan,  and  have  goods  of  same  quality 
not  under  protected  price  plans  and  am  selling  33^  per  cent, 
more  of  protected  goods  than  those  that  are  not." 

J.  C.  Bushey,  of  Lebanon,  Pa.:  "Just  a  word  about  your 
protected  price  plan:  I  would  be  in  favor  of  such  a  plan  not 
only  in  Corn  Flakes  but  in  other  goods,  as  I  think  it  would  put 
the  small  retailer  on  the  same  level  with  the  larger  retailer." 

Thomas  E.  Bawden,  of  Laurium,  Mich.:  "Replying  to 
your  circular,  I  beg  to  say  I  heartily  support  the  Sticker, 
especially  on  the  Kellogg  Corn  Flake.  The  woods  are  full 
of  so-called  Corn  Flakes  that  may  be  bought  in  quantity  for 
a  punched  dime.  In  my  experience  the  consumer  is  willing 
to  pay  the  'price'  for  the  'quality'  and  as  99  per  cent,  of  my 
patrons  who  use  Corn  Flakes  ask  for  Kellogg's,  I  am  'sot' 
enough  to  believe  they  know  what  is  good  and  no  chatter  about 
the  price.     Keep  the  quality  up  and  your  flake  is  safe."    .    .    . 

J.  M.  Holmes,  of  Kennewick,  Wash.:  "I  want  to  con- 
gratulate you  on  the  stand  you  have  taken  in  protecting  your 
price  on  your  Corn  Flakes.  This  is  the  only  salvation  for  the 
small  retail  dealer.  I  sell  about  five  cases  of  your  goods  every 
month  and  will  push  no  other  as  long  as  j^ou  stand  by  the 
price  and  a  square  deal."     .     .     . 

C.  M.  Underbill,  of  Lakewood,  N.  J.:  "I  think  it  a  wise 
plan  to  protect  the  price  of  an  article  of  such  merit  as  Kellogg's 


398 


ADVERTISING  AS  A  BUSINESS  FORCE 


Corn  Flakes.  I  have  handled  the  article  for  a  number  of 
years,  and  take  pride  in  offering  it  to  my  trade.  I  find  nothing- 
equal  to  it  among  the  many  imitations.  I  think  it  unfair  after 
introducing  an  article  of  merit  to  have  some  price  cutter  come 
in  and  cut  the  price  until  one  feels  like  setting  it  aside  for  some- 
thing else  in  order  to  get  a  living  profit.  This  happened  several 
times  with  good  articles,  and  it  is  unfair  to  the  manufacturer,  to 
the  grocer,  and  to  the  consumer.  We  cannot  work  for  nothing, 
and  are  s^ometimes  compelled  to  do  things  which  would  not 
be  done  if  we  had  the  protection  which  some  manufacturers 
give  the  jobbers." 

The  votes  we  have  thus  far  received  were  distributed  as 
follows : 


STATES  YES 

Alabama 8 

Alaska 2 

Arkansas 11 

Arizona 5 

California    52 

Colorado 37 

Connecticut 29 

Delaware 2 

Dist.  of  Columbia 1 

Florida 14 

Georgia 4 

Idaho  10 

Illinois 82 

Indiana 46 

Iowa 13 

Kansas 16 

Kentucky    6 

Louisiana 5 

Maine 14 

Maryland    14 

Massachusetts    46 

Michigan 146 

Minnesota 29 

Mississippi 11 

Missouri 16 

Montana 10 


STATES  YES      NO 

Nebraska 7 

Nevada  

New  Hampshire 20 

New  Jersey   48 

New  Mexico 4 

New  York  137         1 

North  Carolina 3 

North  Dakota 13 

Ohio   89         1 

Oklahoma 3 

Oregon 20 

Pennsylvania    134 

Rhode  Island 7 

South  Carolina 6         1 

South  Dakota 17 

Tennessee 5 

Texas  6 

Utah 13 

Vermont    10 

Virginia 15 

Washington 51 

West  Virginia   12 

Wisconsin 49         ] 

Wyoming 5 

Scattering 95 


Total 1397 


1405 


Another  case  taken  from  the  grocery  trade  is  that  of  the 
coffee  house  of  B.  Fischer  &  Company,  of  New  York,  exploiters 
of  the  Hotel  Astor  coffee.     The  advertising  manager  of  this 


PRICE  MAINTENANCE  399 

company,  Frederick  W.  Nash,  discusses  the  experience  of  that 
company  in  the  following  terms : 

*Editorial  Note. —  B.  Fischer  &  Co.'s  retail  price  protection  policy  has 
grown  out  of  fifty  years  of  experience  as  importers,  manufacturers  and  packers 
for  the  grocery  trade.  In  view  of  the  increasing  agitation  the  country  over 
to  have  the  next  Congress  pass  a  law  that  shall  allow  reasonable  price  main- 
tenance on  advertised  brands,  the  data  herewith  are  valuable. 

"The  very  germ  of  civilized  industry  is  the  idea  of  well- 
ordered  mutual  work  instead  of  disordered  antagonistc  work — 
a  helpful  and  common-sense  co-operation  rather  than  a  riotous 
and  haphazard  competition."  So  writes  Former  United  States 
Senator  Albert  J.  Beveridge,  discussing  the  Sherman  law  and 
its  misapplication  to  modern  business.  He  also  quotes  history 
as  showing  that  failures  and  hard  times  are  unfailing  results 
of  unintelligent,  unrestrained  competition  of  hundreds  of 
thousands  of  little  enterprises. 

W.  K.  Kellogg,  of  the  Kellogg  Toasted  Corn  Flake  Company, 
confirms  this  view  from  practical  experience  as  a  manufacturer 
and  distributor  of  food.  He  says  in  Printers'  Ink,  December  7 
issue:  "I  know  of  no  better  way  —  indeed,  I  know  of  no 
other  way  —  to  ensure  a  living  profit  to  the  dealer  than  to 
protect  the  price.  .  .  .  The  grocery  business  is  a  great, 
big,  loosely  organized  trade.  For  every  one  real  business  man 
in  the  trade  there  are  many  who  do  not  know  their  cost  of 
doing  business.  Nine  out  of  ten  want  to  sell  at  a  fair  price, 
but  when  one  cuts  the  price  of  a  well-known  article  the  rest 
feel  they  must  meet  the  cut  and  the  whole  trade  on  that  one 
item  is  brought  to  a  no-profit  level.  Leave  it  to  them  to  work 
out  their  own  salvation,  and  nine  times  out  of  ten  they  will 
work  out  their  own  destruction  instead,  and  while  they  are 
doing  it  they  also  work  out  the  destruction  of  the  article  they 
are  cutting  —  that's  why  the  manufacturer  must  protect 
his  goods." 

He  might  have  gone  further  and  said  truly  also  that  the 
The       working  out  of  such  matters,  if  left  to  the  dealers. 

Results  results  in  deterioration  of  quality  or  substitution  of 
of  Cutting  inferior  goods  to  meet  purely  price  competition,  with 

Pnces  consequent  disadvantage  to  consumers  as  well  as  to 
retailers  and  manufacturers  of  quality  products. 

^Printers  Ink,  February  1,  1912,  p.  56. 


400        ADVERTISING  AS  A  BUSINESS  FORCE 

The  grocery  trade  is  a  typical  example  of  the  need  for  main- 
taining the  principle  of  legitimate  price  protection,  especially 
on  advertised  and  trade-marked  merchandise.  Here  are  a  fe^ 
facts  and  figures  that  are  illuminating  as  to  the  actual  conditions 
among  grocers  in  the  United  States : 

Number  having  capital  of  $1,000  to  $3,000 56,000 

Number  ha\-ing  capital  of  $3,000  to  $5,000 28,000 

Number  having  capital  of  over  $5,000 16,000 

Total,  exclusively  grocers  (not  including  stores  carrj-ing  other  lines, 
such  as  general  stores,  department  stores,  etc.) 100,000 

In  addition  to  these  100,000  which  constitute  the  successful 
class,  there  are  more  than  100,000  additional  listed  and  classified 
as  grocers  with  less  than  $1,000  investment  or  resource. 

The  normal  cost  of  doing  a  grocery  business  under  modern 
conditions  (now  that  the  housewife  must  have  everything 
delivered  for  her  on  short  notice,  even  to  a  five-cent  box  of 
crackers  or  a  penny  yeast  cake)  varies  from  15  to  18  per  cent, 
of  gross  sales  —  17  per  cent,  is  considered  a  fair  average.  The 
grocer's  gross  profit  on  all  sales  averages  only  20  per  cent, 
rarely  more,  often  less.  Hence  he  can  figure  on  an  actual  net 
profit  of  only  3  per  cent. 

Let  us  suppose  that  the  successful  100,000  grocers  manage 
to  turn  over  their  entire  capital  monthly  on  this  basis: 

Business  with  $1,000  capital,  $12,000  annual  sales,  earns $    360 

Business  with  $2,000  capital,  $24,000  annual  sales,  earns 720 

Business  with  $3,000  capital,  $36,000  annual  sales,  earns 1,080 

Business  with  $5,000  capital,  $60,000  annual  sales,  earns 1,800 

Contrast  these  returns  for  investment,  risks,  long  hours 
and  hard  work  required  in  the  grocery  trade  as  compared  with 
profits  and  conditions  in  other  lines  of  business,  and  all  the 
talk  about  the  grocer's  large  profits  being  a  chief  cause  of  the 
high  cost  of  living  seems  pure  piffle.  One  can  count  on  two 
hands'  fingers  about  all  the  men  in  the  United  States  who  have 
really  gotten  rich  in  the  retail  grocery  business  in  the  last 
generation 

But  this  is  not  the  worst  of  the  grocer's  troubles.  Consider 
the  army  of  small,  unbusinesslike,  unsuccessful  grocers,  who 
come  and  go,  in  and  out  of  the  business  annually.  There  is 
nearly  20  per  cent,  change  in  the  personnel  of  dealers;  r.  e., 
including    those    in    the    business    and    those    who    come    in 


PRICE  MAINTENANCE  401 

and  go  out  within  a  year.  This  fearful  rate  of  mortality 
and  change  keeps  the  trade  in  an  unsettled,  unorganized 
condition,  and  renders  next  to  impossible  the  working  out  by 
retailers  themselves  of  any  effective  price  maintenance  reform  — 
especially  as  they  are  to  run  afoul  of  the  Sherman  law  if  they 
combine  to  that  end. 

With  full  realization  of  these  conditions  through  more  than 
half  a  century's  grocery  trade  experience,  B.  Fischer  &  Co. 
stand  squarely  committed  to  the  principle  of  legitimate  and 
reasonable  price  protection  for  the  retailer  of  Hotel  Astor  Coffee 
and  other  advertised  specialties. 

This  policy  was   adopted  in  the  beginning   and    has  been 

adhered  to  as  a  necessary  and  "reasonable  restraint"  of  retail 

price  making,   both  above  and  below  the  standard 

Reasonable  considered  fair  and  most  advantageous  to  all  con- 

of  Prices    cerned.     Not  only  is  the  dealer  protected  in  making 

a  legitimate  profit  on  Hotel  Astor  Coffee,  but  he  is 

protected  from  asking    an  excessive,  unbusinesslike  profit  — 

a  policy  only  too  common,  and  one  that  only  increases  his 

competition  from  special  tea  stores  and  the  premium  coffee 

schemes  which  have  been  the  natural  outgrowth  of  the  average 

family  grocer's  mistaken  policy  in  trying  to  make  up  through 

excessive  profits  on  teas  and  coffees  for  lost  profits  on  sugar 

and  similar  no-profit  lines. 

B.  Fischer  &  Co.  believe  in  advertising  the  retail  price  to 
the  consumer,  for  this  reason  (and  others),  and  while  there  are 
the  usual  trade  exceptions  in  the  way  of  "hide-bound  private- 
brand  stores,"  "long-profit,  long-credit  accounts,"  etc.,  that 
object  to  this  method  of  regulating  their  profits,  our  experience 
is  that  the  better  class  grocery  trade  in  general  are  in  sympathy 
with  a  policy  which  provides  for  a  "square  deal  for  everybody." 

When  it  was  necessary  recently  to  advance  the   price   of 

Hotel    Astor   Coffee    the    dealer    was    not    left    to    struggle 

Dealers     ^^'i^^   the   problem   of   getting   the   advanced    retail 

Not  Left    price  alone,   but  B.  Fischer   &   Co.  assumed  entire 

To  Struggle  responsibility  for  making  the  advance  to  consumer, 

Ahne  ^^^  explained  the  reasons  fully  in  a  series  of  140-line 
newspaper  advertisements. 

The  writer  concurs  fully  with  Mr.  Kellogg  in  his  view  that 
"when  the  principle  of  price  protection  is  brought  into  court 
by  a  litigant  having  clean  skirts,  engaged  in  a  legitimate  business 
and  maintaining  a  schedule  of  prices  solely  to  ensure  a  safe 


402        ADVERTISING  AS  A  BUSINESS  FORCE 

economic   plan   of   distribution,    it   will   be   upheld   and   vin- 
dicated." 

It  is  alleged  that  the  purpose  of  the  Sherman  law  is  to  correct 
certain  abuses  growing  out  of  associated  effort,  but  not  prevalent 
in  competitive  effort.  There  seems  to  be  general  agreement 
among  those  who  have  studied  the  subject  and  are  in  positions 
which  enable  them  to  speak  with  authority  that  these  abuses 
are  chiefly: 

1.  Over-capitalization,  with  its  watered  stock  influences. 

2.  Arbitrary  price  raising,  and  lowering  especially  to  stifle 
legitimate  competition. 

If  this  is  the  correct  view,  it  certainly  would  require  a  good 
deal  of  stretching  to  apply  the  Sherman  law  to  the  grocery 
trade  in  connection  with  a  co-operative  price  maintenance 
policy  operated  on  a  fair  basis  for  consumer,  retailer,  and  manu- 
facturer —  especially  when  there  is  no  monopoly  of  business 
on  the  goods  protected. 

ARGUMENTS   AGAINST   PRICE   MAINTENANCE 

Duke  C.  Bowers,  of  Memphis,  Tenn.,  is  among  the  earnest 
and  outspoken  opponents  of  price  maintenance.  Mr.  Bow- 
ers has  established  a  chain  of  grocery  stores  in  Memphis  in 
which  he  has  attempted  to  work  out  a  policy  of  uniform  rate 
of  profit  on  all  lines  of  goods  which  he  handles.  This  he  does 
without  regard  to  the  effect  which  this  policy  might  have 
upon  the  prices  to  the  consumer  of  goods  on  which  the  manufac- 
turers attempt  to  maintain  the  price.  Mr.  Bowers  takes  the 
ground  that,  as  far  as  possible,  sugar,  tea  and  every  other  line 
handled  in  his  store  ought  to  bear  an  equal  share  of  the  cost 
of  doing  business.  This  makes  him  necessarily  a  very  active 
opponent  of  price  maintenance  plans.  He  expresses  his  views 
in  the  following  terms: 

*I  take  it  for  granted  that  Printers^  Ink  readers  are  posted 
as  to  the  growing  tendency  of  manufacturers  to  fix,  not  only  the 
jobbing,  but  the  retail  price  as  well,  on  articles  of  their 
manufacture.        Hence,    I    shall     try    to    confine    my    talk 


*Printers'  Ink,  January  5,  1911,  p.  42. 


PRICE  MAINTENANCE  403 

to  the,  what  I  beheve  to  be,  unfair,  unjust  and  selfish  price 
maintenance  plan. 

As  I  see  it,  it  is  selfish  because  the  retailer  wants  it  because 
it  keeps  his  competitor  from  underselling  him  and  the  manufac- 
turer adopts  it  because  it  is  a  fine  bait  to  get  the  retailer  to  push 
his  goods. 

As  I  see  it,  it  is  unfair  for  the  reason  that  it  prevents  a  mer- 
chant from  giving  his  customers  advantage  of  his  money- 
saving  system.  It  is  a  plan  to  put  more  money  in  the  coffers 
of  the  merchant,  hence,  squeezing  more  money  out  of  the 
customers.  A  man's  customers  are  his  best  friends,  hence, 
when  he  joins  in  the  price  maintenance  plan  and  agrees  to  not 
sell  to  his  customers  for  less  than  a  certain  fixed  price,  then, 
to  my  mind,  he  makes  a  mistake. 

A  merchant's  ideal  should  be,  always  "looking  out  for  the 
interest  of  his  customers."     You  think  such  an  idea  silly .f* 

What  would  be  your  opinion  of  the  physician  who  thought 
more  of  the  fee  that  he  would  get  out  of  you  for  an  operation 
than  he  would  of  performing  the  operation  with  the  hope  of 
benefiting  you.f^ 

What  would  be  your  opinion  of  the  minister  of  the  gospel, 
who  was  preaching  for  the  money  there  was  in  it  instead  of 
the  saving  of  souls? 

Isn't  it  reasonable  to  suppose  that  the  merchant  owes  a  duty 
to  his  customers,  just  as  much  as  does  a  physician  to  his  patients, 
or  the  preacher  to  his  flock.'' 

If  you  will  agree  with  me  that  he  does,  then  how  can  you 
disagree  with  me  when  I  say  that  when  a  merchant  joins  any 
kind  of  a  combination  that  prevents  him  from  guarding  the 
interests  of  his  customers,  he  is  most  likely  thinking  of  his  own 
selfish  greed,  thereby  letting  Avarice  instead  of  Duty  be  his 
master. 

The  manufacturer  may  feel  that  the  merchant  is  his  customer, 
therefore  he  should  look  out  for  his  interest.  In  one  sense 
of  the  word,  the  manufacturer  is  right,  yet,  he  should  stop 
to  consider  that  the  user  of  his  product  is  the  one  that  is  his 
best  friend,  hence  he  should  never  lose  sight  of  his  (the  user's) 
interest,  and  when  he  (the  manufacturer)  dictates  to  a  retailer 
that  he  shall  not  sell  his  product  to  the  consumer  for  less  than 
a  certain  price,  he,  the  manufacturer,  has  undoubtedly  in 
this  instance  lost  sight  of  the  interest  of  the  users  of  his 
product.     .     .     . 


404        ADVERTISING  AS  A  BUSINESS  FORCE 

Mr.  Bowers,  in  this  discussion,  does  not  cover  more  than 
the  single  argument  against  price  maintenance  —  the  cost 
to  the  consumer.  But  that  is  the  one  argument  which  still 
resists  the  logic  and  the  skill  of  the  fixed-price  advocates. 
Many  wholesalers  have  given  their  approval  to  the  price- 
maintenance  principle,  and  we  have  already  seen  how  retailers 
regard  the  plan  as  it  is  operated  by  the  Kellogg  Company. 
Many  consumers,  too,  may  be  persuaded  that  their  interests 
might  be  served  better  in  the  long  run  if  everybody  in  the  selling 
system  were  satisfied  with  fixed  terms  and  profits  for  buying 
and  selling.  But  when  a  25-cent  tooth  powder  of  guaranteed 
quality  can  be  bought  for  19  cents,  or  when  a  15-cent  breakfast 
food  can  be  bought  for  10  cents,  the  consumer  is  prone  to  forget 
his  logic  and  buy  where  the  prices  are  low.  He  is  very  apt  to 
feel  that  if  the  price  cutter  is  so  clever  that  he  can  profitably 
deliver  the  goods  at  a  lower  price,  or  so  stupid  that  he  is  willing 
to  sell  them  at  a  loss,  the  result  to  him,  as  a  consumer,  is  much 
the  same.  And  thoughtful,  indeed,  is  the  consumer  who  turns 
his  back  on  these  savings,  taxing  himself,  by  that  much,  to 
save  his  less  able,  or  less  foolish,  local  storekeeper  from  anni- 
hilation. 

Whether  this  position  of  the  consumer  be  sound  or  not,  it 
is  surprisingly  general,  and  it  has  split  more  than  one  very  stanch 
price-maintenance  craft. 

Thus  far,  practically  all  of  the  illustrations  which  we  have 
employed  in  the  price-maintenance  field  have  been  confined 
to  the  grocery  business,  but  the  same  problems  are  met  in 
virtually  every  line  of  trade  going  out  into  consumption  through 
the  retailer.  The  attitude  of  large  department  stores  finds 
typical  illustration  in  the  views  of  R.  H.  Macy  Company,  of 
New  York : 

*0f  all  the  rebels  among  retailers  who  have  seceded  from 
the  manufacturer's  policy  of  price  protection,  R.  H.  Macy  & 
Co.,  New  York,  are,  perhaps,  the  most  rebellious.      Ask  any 

*  Printers'  Ink,  August  4,  1910,  p.  8. 


PRICE  MAINTENANCE  405 

manufacturer  who  has  been  trying  to  maintain  his  prices  what 

success  he  has  met  with,  and,  in  a  goodly  number  of  cases,  if 

he  has  experienced  difficulty  in  any  direction,  it  has 

been  with  this  well-known  department  store. 

^'stares         Scores  of  manufacturers  have  refused  to  sell  it  any 

View  of    more  of  their  goods.     But  that  has  only  proved  the 

Price      beginning  of  their  troubles.     As    likely  as  not,  the 

Main-  j^Qygg  Qf  Macy  has  apparently  managed  to  get  in- 
directly, by  some  devious  and  inexplicable  manner, 
the  goods  which  have  been  refused  it  directly.  Complicated 
business  ramifications  and  connections  have  made  this  possible. 
The  manufacturers  have  been  quite  in  the  dark  as  to  how  it 
has  been  managed.  Only  those  of  them  whose  products  have 
been  of  such  a  nature  that  they  could  be  serially  numbered 
(a  big  expense  at  best)  or  who  have  sold  their  goods  direct, 
and  not  through  the  jobbers,  have  had  any  certain  means 
of  insuring  their  position,  as  a  rule. 

There  was  a  time,  when  the  Macy  store  was  located  farther 
downtown,  when  it  was  much  smaller  and  much  less  preten- 
tious. Whether  it  has  been  due  to  the  removal  uptown  to 
Thirty-fourth  Street  and  into  a  new  and  large  building,  or  to 
the  proverbial  Macy  attitude  toward  prices,  or  to  something 
else,  the  fact  remains  that  R.  H.  Macy  &  Co.  has  prospered 
rapidly. 

The  concern's  monumental  instance  of  opposition  to  the 
wishes  of  the  producers  in  the  matter  of  prices  has  been  in 
the  book  department.  Admittedly,  this  concern  plans  to 
carry  the  matter  of  book  prices  to  a  final  conclusion  in  and  out 
of  the  courts.  When  it  is  once  disposed  of,  the  officials  of  the 
store  propose  to  concentrate  their  efforts  along  other  lines, 
where  the  manufacturers  have  also  been  particularly  insistent 
as  to  price  standards.  In  drug  lines,  now,  Macy  is  a  persistent 
and  bold  opponent  of  price  maintenance. 

In  order  to  give  its  readers  an  authoritative  idea  of  the  point 
of  view  of  a  retail  concern  which  is  such  a  leading  dyed-in-the- 
wool  opponent  of  price  maintenance.  Printers'  Ink  has  obtained 
some  pertinent  statements  from  one  of  the  men  who  formulate 
the  Macy  policies,  who  has  good-naturedly  explained  the 
price-maintenance  idea  as  it  looks  from  the  Macy  perspective, 
the  other  side  of  the  fence. 

"In  the  first  place,"  he  said,  "let  me  explain  that  we  do 
not  look  upon  ourselves  as  price  cutters.     We  are  not  that,  we 


406        ADVERTISING  AS  A  BUSINESS  FORCE 

believe.  To  our  point  of  view,  we  are  rather  opponents  of 
price  boosting.  Take  our  book  prices,  for  example,  which  are 
so  often  referred  to.  We  were  selling  current  fiction  at  98  cents 
regularly  before  the  book  people  made  a  combine  and  tried 
to  force  us  to  boost  our  prices  to  $1.08,  the  price  other  dealers 
regularly  ask  for  new  copyright  fiction.  This  we  have  refused 
to  do.  We  have  gone  to  every  possible  extreme  to  get  books, 
when  they  have  been  refused  us  directly,  which,  we  believe, 
we  have  been  perfectly  justified  in  doing.  We  have  obtained 
our  books  and  have  sold  them  as  we  have  seen  fit.  That  is 
all  there  is  to  it. 

"What  the  book  people  have  tried  to  do  is  only  an  example 
of  the  situation  as  regards  practically  all  the  self-styled  'price- 
maintainers. '  These  manufacturers  trade-mark  their  goods; 
then  they  advertise  the  trade-mark  and  finally  they  attempt 
to  boost  the  prices,  when  the  public  has  learned  to  want  what 
they  make,  asking  the  retailer  to  combine  with  them  in  their 
schemes  to  squeeze  the  purses. 

"There  is  one  thing  which  should  be  especially  kept  in  mind 
in  connection  with  the  Macy  establishment,"  he  continued. 
"It  is  the  fact  that  we  sell  here  on  a  cash  basis  strictly.  In 
every  instance  we  have  the  buyer's  money  before  the  buyer 
gets  our  goods.  This  means  that  we  have  no  charge  accounts, 
and  that  we  are  unable  to  offer  to  the  public  those  facilities 
which  go  hand-in-hand  with  the  credit  privilege.  Without 
these,  we  must  offer  some  substitute  inducement  to  bring  the 
public  to  us.  Otherwise  the  public  would  not  come.  That 
'something'  must  be  even  more  attractive  than  the  credit 
privilege.  Years  ago  we  decided  that  it  should  be  price 
inducements. 

"It  is  our  business  working-principle  to  sell  everything 
lower  than  it  can  be  bought  for  elsewhere  in  any  other  compet- 
ing retail  establishment.  We  have  a  corps  of  workers,  I  may 
add,  who  make  it  their  constant  endeavor  to  go  into  our  com- 
petitor's stores  and  learn  what  prices  are  being  asked.  We 
won't  sign  price-maintenance  agreements.  And,  as  far  as 
that  goes,  I  may  say  that,  looking  at  the  matter  broadly, 
we  much  prefer  not  to  sell  an  article  at  all  if  we  cannot  sell  it  at 
a  lower  price  than  others.  It  was  on  this  basis,  for  example, 
that  we  sold  Cuticura  soap  at  a  big  loss  for  a  long  period  of  time. 

"And  there  is  another  important  point  which  should  be  kept 
in  mind  in  connection  with  Macy's.     We  are  a  one-price  house. 


PRICE  MAINTENANCE  407 

By  that  we  mean  that  we  sell  all-comers  at  the  same  price. 
You  may  think  that  that  is  only  to  be  expected,  that  the  day 
of  the  store  of  many  prices  has  long  since  passed.  But  it  has 
not.  The  fact  is,  and  our  investigations  have  gone  to  prove 
it  in  any  number  of  cases,  that  most  of  our  competitors,  whose 
reputation  for  maintaining  prices  is  generally  established  more 
illustrious  than  ours,  make  a  practice  of  selling  price-restricted 
articles  at  a  considerable  discount  to  clergymen,  dressmakers 
and  a  host  of  others  who  make  up  a  number  of  special  classes. 
Claims  to  membership  in  these  privileged  classes  need  not 
be  proven. 

The  Macy  authority  was  asked  if  he  did  not  consider  that 
a  progressive  retailer  owed  something  to  the  progressive  manu- 
facturer in  the  matter  of  protecting  prices. 

"Let  me  answer  that  question,"  he  replied,  "by  asking  a 

question  in  return.       Do  your  readers  who   are  enthusiastic 

believers   in    price    maintenance   feel   that  they  are 

nhr   r     under  any  obligation,  moral  or  legal,  to  Macy's  after 

Ceases  they  have  bought  something  here  and  have  paid  for 
it?  Wouldn't  they  feel  that  we  were  presuming  upon 
our  prerogatives  if  we  attempted  to  instruct  them  as  to  how 
they  should  use,  or  on  what  basis  they  should  resell,  whatever 
they  have  bought  of  us.'*  There  is  really  nothing  different, 
from  our  point  of  view,  in  our  relation  with,  and  our  obligations 
to,  the  manufacturers. 

"The  manufacturer  gets  from  us  the  prices  they  ask  of  us, 
and  we  certainly  consider  our  obligations  to  them  ended  when 
we  make  financial  settlement  with  them." 

The  Macy  head  was  asked  whether,  inasmuch  as  he  claims 
to  be  a  friend  of  the  consumer,  he  considers  it  for  the  best 
interest  of  the  consumer  for  prices  to  be  maintained;  whether, 
if  prices  are  not  maintained  by  Macy's  and  other  big  retailers, 
the  ultimate  result  is  not  that  thousands  of  small  dealers 
refuse  to  handle  the  goods  in  question  at  all,  because  they 
cannot  sell  them  in  competition,  all  of  which  means  smaller 
aggregate  sales  for  the  manufacturers,  necessitating  that 
they,  in  turn,  either  cheapen  quality  or  go  out  of  business, 
a  disastrous  outcome  from  an  economic  standpoint,  in  either 
event. 

"But  is  this  the  case?"  he  asked  in  way  of  reply.  "I  have 
one  proprietary  article  in  mind  —  I'll  tell  you  its  name, 
Listerine  —  which  has  not  been  price-maintained  and  which 


408        AD\TERTISING  AS  A  BUSINESS  FORCE 

has  been  cut  and  cut  by  the  retail  dealers.  Yet  I  have  heard 
that  the  sales  of  Listerine  have  been  going  up  and  up,  all  the 
time  the  cutting  has  continued.  These  manufacturers  have 
always  got  the  price  they  have  asked.  They  have  had  no 
reason  for  complaint.     It  hasn't  been  poor  economics. 

"But,    while   we   are  on  the  general  subject  of  quality  in 

relation  to  price  maintenance,"  he  continued,  "isn't  quality 

really  a  relative  matter  at  best.?     I  can  grant  you, 

^V^^      perhaps,  that  advertised  goods  are  high  in  quality, 

anceand  ^'^^n  that  they  could  not  be  successfully  advertised 

Quality  if  they  were  not  so.  But  we  believe  that  advertised 
goods  are  not,  as  a  rule,  better  in  quality  than  it 
is  imperative  they  should  be  in  order  to  make  them  a  paying 
proposition. 

"It  has  been  our  experience  that  most  manufacturers  who 
advertise  attempt,  in  one  way  or  another,  to  boost  prices 
higher  than  they  normally  should,  in  order  to  meet  the  cost 
of  their  advertising.  Because  of  a  certain  false  pride,  we  buy 
a  lady  a  box  of  80-cent  candy  of  one  of  two  or  three  widely 
advertised  brands.  Yet  I  am  positive  that  there  is  candy 
selling  at  59  cents  which  is  the  equal  of  any  80-cent  variety 
ever  made.  The  difference  in  price  goes  toward  paying  for 
the  advertising." 

The  Macy  head  was  asked  if  there  were  not  instances  of 
advertised  goods  which  are  sold  at  prices  as  low  or  lower  than 
those  asked  for  any  unadvertised  goods.  x\  certain  widely 
advertised  cracker  was  mentioned  as  an  instance  which,  without 
a  doubt,  i.s  well  worth  the  five  cents  asked  for  it.  It  was 
pointed  out  that  Macy's  frequently  sold  this  cracker  and  other 
like  goods  at  less  than  the  advertised  prices.  He  was  asked 
for  an  explanation  of  such  merchandising. 

"I  cannot  say  with  certainty  as  regards  the  goods  referred 
to,"  was  the  reply.  "But  I  do  knoAv  of  a  number  of  instances 
where  manufacturers  of  price-advertised  goods  have  come  to  us 
and  requested  that  we  sell  their  goods  at  whatever  price  we  wish 
if  only  we  will  give  publicity  to  the  fact  that  we  are  handling 
them.  This  is  particularly  often  the  case  with  manufacturers 
of  new  products  for  which  they  are  striving  to  get  a  first  market. 
Manufacturers  appreciate  that  when  a  store  such  as  Macy's 
advertises  their  articles  it  means  an  immense  amount  of  free 
and  authoritative  publicity  for  them.  ^Yhen  the  ])ublic  comes 
to  learn  the  mere  fact  that  a  store  like  ours  is  carrying  certain 


PRICE  MAINTENANCE  409 

new  products,  that  fact  helps  the  sale  of  those  products  every- 
where to  a  material  degree. 

"And,  in  general,"  he  concluded,  "we  believe  that  the 
tendency  of  the  times,  or  rather  the  tendency  of  the  courts 
which  reflect  the  tendencies  of  the  times,  is  away  from  price- 
maintenance  and  toward  free,  unrestricted  merchandising  and 
retailing. 

LEGAL   ASPECTS   OF   PRICE-MAINTENANCE 

The  advocates  of  price-maintenance  have  been  obliged  to 
revise  some  of  their  accepted  methods  as  a  result  of  the  deci- 
sion rendered  by  the  Supreme  Court  of  the  United 

ji^illg  States  April  3,  1911,  in  the  case  of  Dr.  Miles 
^s.  Medical  Coinpanyvs.John  D.  Park  &  Sons  Company, 
Decision  ^f  Cincinnati,  Ohio.  The  Miles  company  are  makers 
of  proprietary  medicines  prepared  under  secret  for- 
mulas but  sold  in  packages  identified  by  a  trade-mark. 
They  alleged  that  their  trade  had  been  interfered  with  and 
their  profits  reduced  by  price  cutting  by  the  Park  company. 

The  Miles  company  method  of  sale  was  an  ingenious  one, 
the  sale  to  the  wholesale  trade  being  conducted  on  an  agency 
basis.  The  goods  by  the  terms  of  the  agency  contract  did 
not  belong  to  the  wholesaler  and  were  sent  to  him  only  on 
consignment.  Title  did  not  pass  from  the  manufacturer  until 
the  goods  were  sold  to  the  retailer.  This  was  believed  to 
make  it  possible  for  the  manufacturer  to  dictate  the  price  at 
which  the  goods  should  be  consigned  to  the  wholesaler  and 
also  the  price  at  which  he  was  to  convey  them  to  the  retailer. 
The  wholesale  contract  further  stipulated  that  the  goods  were 
to  be  released  by  the  wholesaler  only  to  designated  retail 
agents  of  the  manufacturer. 

There  was  also  a  retail  agency  contract  which  similarly  tied 
up  the  retailer  and  stipulated  wholesale  price,  quantity  dis- 
counts and  retail  price,  and  provided  for  penalties  for  violations. 
The  Miles  company  was  selling  its  goods  under  the  terms  of 
these  contracts  through  400  jobbers  and  25,000  retailers. 


410        ADVERTISING  AS  A  BUSINESS  FORCE 

When  the  Park  company  cut  the  retail  price  on  some  of 
the  goods  in  violation  of  the  term  of  the  contract,  the  Miles 
company  asked  for  an  injunction  restraining  them  from  at- 
tempting to  induce  any  of  the  wholesale  or  retail  agencies, 
under  contract,  to  violate  the  terms  of  their  contract  agreement. 
Justice  Hughes  prepared  the  opinion  of  the  Court.  Justice 
Holmes  dissented,  and  Justice  Lurton  did  not  sit  in  the 
case.  Otherwise  the  Court  agreed  with  Justice  Hughes.  The 
decision  first  analyzed  the  two  contracts  and  takes  the  ground 
that  the  "agency"  terms  in  them  were  only  a  subterfuge, 
and  that  they  were  in  restraint  of  trade.  It  further  declared 
that  even  the  secret  processes  of  the  company  did  not  give  it 
a  right  to  fix  the  price.  The  decision  then  sums  up  the  case 
as  follows: 

The  present  case  is  not  analogous  to  that  of  a  sale  of  good 
will,  or  of  an  interest  in  a  business,  or  of  the  grant  of  a  right 

Part  of   ^^  ^^^  ^  process  of  manufacture.     The  complainant 
the       has  not  parted  with  any  interest  in  its  business  or 

Supreme  instrumentalities  of  production.     It  has  conferred  no 
Court's    rigJit  by  virtue  of  which  purchasers  of  its  products 

Veciston  j^g^y  compete  with  it.  It  retains  complete  control 
over  the  business  in  which  it  is  engaged,  manufacturing  what 
it  pleases  and  fixing  such  prices  for  its  own  sales  as  it  may 
desire.  Nor  are  we  dealing  with  a  single  transaction,  conceiv- 
ably unrelated  to  the  public  interest.  The  agreements  are  de- 
signed to  maintain  prices,  after  the  complainant  has  parted 
with  the  title  to  the  articles,  and  to  prevent  competition  among 
those  who  trade  in  them. 

The  bill  asserts  the  importance  of  a  standard  retail  price 
and  alleges  generally  that  confusion  and  damage  have  resulted 
from  the  sales  at  less  than  the  prices  fixed.  But  the  advantage 
of  established  retail  prices  primarily  concerns  the  dealers. 
The  enlarged  profits  which  would  result  from  adherence  to 
the  established  rates  would  go  to  them  and  not  to  the  com- 
plainant. It  is  through  the  inability  of  the  favored  dealers 
to  realize  these  profits,  on  account  of  the  described  competition, 
that  the  complainant  works  out  its  alleged  injury.  If  there 
be  any  advantage  to  a  manufacturer  in  the  maintenance 
of  fixed  retail  prices,  the  question  remains  whether  it  is  one 


PRICE  MAINTENANCE  411 

which  he  is  entitled  to  secure  by  agreements  restricting  the 
freedom  of  trade  on  the  part  of  dealers  who  own  what  they 
sell.  As  to  this,  the  complainant  can  fare  no  better  with  its 
plan  of  identical  contracts  than  could  the  dealers  them- 
selves if  they  formed  a  combination  and  endeavored  to 
establish  the  same  restrictions,  and  thus  to  achieve  the 
same  result,  by  agreement  with  each  other.  If  the  immediate 
advantage  they  would  thus  obtain  would  not  be  sufficient 
to  sustain  such  a  direct  agreement,  the  asserted  ulterior  benefit 
to  the  complainant  cannot  be  regarded  as  sufficient  to  support 
its  system. 

But  agreements  or  combinations  between  dealers,  having 
for  their  sole  purpose  the  destruction  of  competition  and  the 
fixing  of  prices,  are  injurious  to  the  public  interest  and  void. 
They  are  not  saved  by  the  advantages  which  the  participants 
expect  to  derive  from  the  enhanced  price  to  the  consumer. 
People  V.  Sheldon,  139  N.  Y.,  251;  Judd  v.  Harrington, 
139  N.  Y.  105;  People  v.  Milk  Exchange,  145  N.  Y.  267; 
United  States  v.  Addyston  Pipe  &  Steel  Co.,  85  Fed.  271;  on 
app.  175  U.  S.  211;  Montague  &  Co.  v.  Lowry,  193  U. 
S.  38:  Chapin  v.  Broivn,  83  Iowa,  156;  Craft  v.  McConoughy, 
79  111.  346;  W.  H.  Hill  Co.  v.  Gray  &  Worcester,  127  N.  W.  Rep. 
(Mich.)  803. 

The  complainant's  plan  falls  within  the  principle  which 
condemns  contracts  of  this  class.  It,  in  effect,  creates  a  com- 
bination for  the  prohibited  purposes.  No  distinction  can 
properly  be  made  by  reason  of  the  particular  character  of  the 
commodity  in  question.  It  is  not  entitled  to  special  privilege 
or  immunity.  It  is  an  article  of  commerce  and  the  rules 
concerning  the  freedom  of  trade  must  be  held  to  apply  to  it. 
Nor  does  the  fact  that  the  margin  of  freedom  is  reduced  by  the 
control  of  production  make  the  protection  of  what  remains, 
in  such  a  case,  a  negligible  matter.  And  where  commodities 
have  passed  into  the  channels  of  trade  and  are  owned  by 
dealers,  the  validity  of  agreements  to  prevent  competition 
and  to  maintain  prices  is  not  to  be  determined  by  the  circum- 
stance whether  they  were  produced  by  several  manufacturers 
or  by  one,  or  whether  they  were  previously  owned  by  one 
or  by  many.  The  complainant  having  sold  its  product  at 
prices  satisfactory  to  itself,  the  public  is  entitled  to  whatever 
advantage  may  be  derived  from  competition  in  the  subsequent 
traffic. 


412        ADVERTISING  AS  A  BUSINESS  FORCE 

On  March  11,  1912,  the  Supreme  Court  of  the  United  States 

handed  down  its  decision  in  the  case  of  Sydney  Henry  vs.  A.  B. 

Dick  Co.,  which  served  to  further  estabUsh  the  ac- 

P  rice  Main-  .    j   -j  p       •  .      n*  p         i  r 

tenance  on  cepted  ideas  oi  price-controlhng  power  oi  makers  ot 

Patented  patented  articles.  This  decision,  in  brief,  took  the 
ground  that  the  monopoly  power  granted  by  the 
patent  gave  the  patentee  the  right  to  enforce  restrictions 
covering  the  article  subsequent  to  sale.  This  decision  has 
led  the  makers  of  patented  articles  to  feel  much  freer  to 
enforce  price-restrictions  than  they  were  between  the  time  of 
the  Miles  vs.  Park  decision  and  the  date  of  this  new  de- 
cision—  which  is  commonly  referred  to  as  the  Dick  case, 
or  the  Rotary  Mimeograph  case.  This  decision  was  reached  by 
a  4  to  3  vote,  there  being  one  vacancy  on  the  Bench,  and 
Justice  Day  not  participating  in  the  case  on  account  of  illness. 
An  ineffectual  effort  was  made  to  have  the  case  given  a  re- 
hearing, and  the  House  Committee  on  Patents  has  submitted 
to  Congress,  (largely  as  a  result  of  this  case)  the  Oldfield  Bill 
defining  the  limits  of  control  over  an  article  after  it  is  sold  — 
even  if  it  is  sold  under  a  patent  monopoly.  This  bill  is  against 
the  trend  of  previous  decisions;  if  it  is  passed  the  price- 
controlling  power  of  the  seller  of  a  patented  article  wall  not 
long  enjoy  its  present  degree  of  freedom  from  legal  restric- 
tion.* 

The  Miles  vs.  Park  decision  necessarily  upset  the  selling 
arrangements  of  many  manufacturers,  and  the  question  as  to 
how  far  a  manufacturer  of  unpatented  articles  can  go  in  the 
matter  of  maintaining  his  price  and  still  keep  within  the  law 
is  by  no  means  settled  even  yet.  An  illustration  of  what  took 
place  in  many  concerns  is  found  in  the  following  letter  which 
was  sent  out  by  the  Eastman  Kodak  Company  to  its  retailers, 
and  the  announcement  which  followed  it: 


*The  '^ Bath-Tub  Case"  decision  rendered  November  18,  1912,  denies  the 
right  to  restrict  the  terms  of  sale  of  unpatented  articles  produced  on  patented 
machinery. 


PRICE  MAINTENANCE  413 

Eastman  Kodak  Company, 
Rochester,  N.  Y.,  Nov. 15,  1911. 
*  To  the  Trade 

New  Terms  of  Sale 

Until  recently  it  has  been  our  belief  that  any  manufacturer 
had  the  right  to  control  the  merchandising  of  his  goods  con- 
taining secret  compositions,  as  well  as  his  patented 
The       goods.     It  was  also  our  opinion,  and  for  that  matter 

Kodak"    ^^  ^^  ^^^^^  ^^^  opinion,  that  such  control  works  to  the 

Policy  ultimate  advantage  of  all  concerned  ■ —  consumer, 
dealer,  and  manufacturer  —  because  it  means  that 
the  manufacturer  puts  his  whole  endeavor  into  making  his 
goods  better  in  order  to  meet  competition  instead  of  attempting 
to  meet  it  by  cutting  the  cost,  generally  at  the  expense  of 
quality. 

However,  the  Supreme  Court  of  the  United  States  has 
recently  decided  that  a  manufacturer  cannot  enforce  a  contract 
by  which  he  attempts  to  control  the  retail  selling  price  of  his 
goods  made  by  secret  processes,  but  not  patented. 

Desiring  to  conform  to  the  spirit  as  well  as  the  letter  of 
the  law,  we  shall  from  this  date  remove  all  restrictions  which 
have  heretofore  prevailed  in  connection  with  non-jjatented 
goods. 

We  are  sending  herewith  our  new  Terms  of  Sale,  showing 
the  changes  that  have  been  made. 

With  the  restrictions  removed  from  our  unpatented  goods 
we  fear  that  there  will  be  a  tendency  in  some  quarters  to  reduce, 
by  price  cutting,  the  dealers'  profits. 

Desiring  to  do  what  we  can  to  offset  the  loss  from  such  price 
cutting,  and  thus  help  the  dealer  to  a  reasonable  profit,  we 
have  decided  to  increase  the  discount  of  Kodak  film  from 
25  per  cent,  to  S5  and  10  per  cent. 

Our  business  has  been  built  up  on  a  quality  basis.  Making 
goods  just  as  well  as  we  know  how  has  become  a  fixed  habit. 
We  shall  continue  to  serve  our  customers  with  the  best  photo- 
graphic goods  that  are  made,  shall  continue  to  help  our  con- 
sumer customers  with  our  schools  and  our  demonstrating 
force,  and  our  dealer  customers  with  even  bigger  and  broader 
advertising  than  we  have  done  before. 


*Printers'  Ink,  November  23,  1911,  p.  M. 


414        ADVERTISING  AS  A  BUSINESS  FORCE 

Our  change  in  sales  policy  is  simply  made  in  order  that  we 
may  conform  with  the  recent  decision  of  the  Supreme  Court 
of  the  United  States. 

We  consider  this  an  opportune  time  to  obtain  an  expression 
from  the  trade  as  to  the  desirability,  from  its  standpoint,  of 
our  continuing  our  price-restriction  and  exclusive  sale  policy 
so  far  as  patented  goods  are  concerned.  We  are,  therefore, 
enclosing  herewith  a  post-card  which  we  ask  that  you  use 
in  recording  your  view  of  the  matter.  If,  as  a  result  of  the 
vote  of  the  trade,  we  do  not  find  a  strong  sentiment  in  favor 
of  a  maintenance  of  these  restrictions  on  patented  goods, 
we  shall  remove  them  without  delay. 

We  ask  the  favor  of  a  prompt  reply. 

The  Eastman  company's  Trade  Circular  for  January,  1912, 
contained  the  following  announcement  of  the  results  of  this 
appeal  to  its  dealers: 

*  Terms  Upheld 

DEALERS   PRACTICALLY    UNANIMOUS   FOR  OUR  PRICE  MAINTENANCE    AND   EXCLU- 
SIVE  SALE   POLICY 

There  is  to  be  no  change  in  our  sales  policy  as  to  patented 
goods. 

Our  dealers,  by  their  recent  vote,  have  gone  on  record  as 
almost  unanimously  m  favor  of  a  continuation  of  our  sales 
policy.  Recent  decisions  of  the  United  States  courts  have 
confirmed  a  number  of  similar  decisions  made  during  the  past 
ten  years,  upholding  the  right  of  a  manufacturer  to  control  the 
resale  price  on  patented  goods. 

With  our  dealers  strongly  in  favor  of  our  policy,  with  recent 
decisions  upholding  the  legality  of  the  price  maintenance  policy 
on  patented  goods,  and  with  our  own  belief  that  such  policy  is 
fairest  for  all  concerned  —  consumer,  dealer,  and  manufac- 
turer —  the  course  to  pursue  is  plain :  Our  patented  goods  are 
to  be  handled  only  upon  the  conditions  given  in  our  Terms  of 
Sale,  dated  November  15,  1911. 

We  have  been  confident  all  along  that  the  general  attitude 
of  the  trade  was  favorable  to  our  policy.  Had  we  not  believed 
ourselves  to  be  acting  in  harmony  with  our  dealers,  our  policy 
would  have  been  discontinued  long  ago,  but  even  so  we  were 

*Printers'  Ink,  January  4,  1912,  p.  55. 


PRICE  MAINTENANCE  415 

gratified  at  the  almost  unanimous  support  received  in  the  recent 
referendum. 

Up  to  date  90f  per  cent,  of  our  dealers  have  voted,  and  of 
the  votes  received,  over  98  per  cent,  are  in  favor  of  a  continuation 
of  our  price  restriction  and  exclusive  sale  policy. 

METHODS   OF   MAINTAINING    PRICE 

All  plans  for  price  maintenance  in  the  case  of  unpatented 
articles  are  more  or  less  affected  by  the  Miles  vs.  Park  decision. 
Many  are  still  engaged  in  readjusting  themselves  to  the  decision. 
The  various  bonus  plans  which  provided  for  an  extra  discount 
to  be  given  to  those  who  could  show  that  they  had  maintained 
prices  on  a  given  lot  of  goods  were  most  common.  Then  there 
was  the  "Freeman"  plan  which  did  legally  and  actually  what 
the  Miles  plan  did  nominally  —  put  out  the  goods  on  consign- 
ment. These  and  various  other  methods  attempted  to  secure 
legal  sanction  to  the  idea  of  control  over  the  price  of  the  goods 
as  long  as  they  were  in  process  of  distribution. 

Throughout  the  rearrangement  of  price  maintenance  plans 
which  has  followed  the  Miles  vs.  Park  decision  there  has  run 
one  general  principle,  and  that  is,  to  substitute  for  any  attempt 
at  legal  restraint,  an  appeal  to  the  sense  of  honor  and  personal 
interest  in  the  various  features  of  the  selling  system.  This 
substitutes  for  the  legal  restrictions  of  the  contracts  the  moral 
restrictions  based  on  the  personal  interests  of  the  distributor. 
This  seems  to  be  the  only  feasible  solution  of  the  difficulty 
under  the  present  legal  conditions  in  the  United  States.  If  any 
law  should  be  passed  more  clearly  defining  the  limits  of  price 
maintenance,  and  the  rights  of  the  producer  and  seller  to  place 
restrictions  on  the  handling  of  his  goods,  of  course  the  situation 
would  be  modified;  but  as  it  now  stands  about  the  only  feas- 
ible price  maintenance  system  is  one  which  substitutes  for 
legal  restraint  some  effective  appeal  to  the  distributor's  self- 
interest  and  his  moral  obligation  to  protect  those  who  are  at- 
tempting to  protect  him. 


410        ADVERTISING  AS  A  BUSINESS  FORCE 

A  suggestive  case  showing  how  this  was  done  by  one  manufac- 
turer even  before  the  Miles  vs.  Park  decision  is  told  by  Frank 
H.  Holman: 

*A  white-haired,  grizzled  veteran  of  business  not  long  ago 
smiled  philosophically  at  a  square-jawed  young  manufacturer 
who  was  exhibiting  with  great  satisfaction  a  bunch  of  contracts 
for  price  maintenance  with  dealers  and  jobbers.  "Your 
contracts,"  said  the  old  man,  with  an  air  of  wisdom,  "aren't 
worth  the  paper  they're  written  on." 

The  young  manufacturer  snorted  dissent. 

"Every  honest  man  whose  name  you've  got  signed  to  those 
contracts,"  continued  the  old  man  unabashed,  "would  maintain 
prices  if  he  promised  to  do  so,  contract  or  no  contract;  while 
the  crooks  and  the  wishy-washies  will  break  your  prices,  con- 
tract or  no  contract.  Personal  honor  is  a  stronger  force  than 
imposing  contracts,  legal  seals,  and  foxy  clauses.  There  has 
never  yet  been  written  a  contract  that  couldn't  be  broken 
by  legal  quibble  and  dishonorable  intent.  The  law  is  not 
as  omnipotent  as  you  think  —  and  personal  honor  is  a  practical 
business  factor  that  has  as  yet  to  get  its  full  share  of  credit." 

And  then  that  philosopher-manufacturer  quietly  pulled 
out  some  card  index  drawers  which  were  simply  overflowing 
with  cards  containing  the  names  of  many  thousands  of  retailers 
throughout  this  country,  many  of  them  the  same  as  had  signed 
price-maintenance  contracts  with  the  young  manufacturer. 

"With  every  one  of  these  dealers,"  said  the  elder  manufac- 
turer, "I  have  a  gentleman's  understanding  that  they  will 
not  cut  prices,  and  by  far  the  greater  part  of  them  stand  by 
their  word  —  I've  tested  them  for  years.  I've  never  asked 
them  to  sign  their  name  to  a  thing." 

This  is  no  tale  from  Arcadia  —  the  firm  in  question  is  world- 
renowned  and  does  a  tremendous  annual  volume  of  business 
in  a  wide  variety  of  lines  of  goods.  One  of  these  is 
pFd  soap  —  a  li^ie  ill  which  price  cutting  is  usually  especi- 
of  Honor  al^y  acute;  yet  so  effectual  is  the  system  that  the 
company's  Eastern  manager  states  that  in  the  course 
of  years  of  experience  he  has  never  met  with  a  single  failure 
to  finally  line  up  the  dealers  upon  a  strict  price-maintenance 
policy  based  solely  upon  spoken  pledges. 

*Printers'  Ink,  June  16,  1910,  p.  50. 


PRICE  MAINTENANCE  417 

The  men  who  would  admit  that  they  are  wilfully  dishonest 
or  that  their  spoken  word  is  not  to  be  trusted  are  few  and 
far  between,  if  really  they  are  ever  to  be  met  with  among 
prospering  business  men.  In  that  fact  lies  the  secret  of  the 
success  of  the  policy  of  this  soap  house.  When  one  of  the 
latter's  salesmen  closes  with  a  dealer  for  the  initial  order,  the 
interview  invariably  ends  with  the  salesman  explaining  that  it 
is  the  established  policy  of  his  house  to  insist  upon  strict  price 
maintenance  and  asking  the  dealer  point-blank  if  he  pledges, 
upon  his  honor,  not  to  cut  prices. 

Sometimes,  indeed  very  often,  such  a  dealer  will  haughtily 
answer  that  he  is  not  a  "price  cutter"  and  "never  has  cut 
prices."  But  such  an  answer  is  not  accepted  as  final.  Every 
salesman  is  explicitly  instructed  to  insist  upon  a  firm  "Yes-or- 
No"  answer  to  his  question.  If  it  is  "Yes,"  all  right;  if  it  is 
"No,"  the  salesman's  line-o'-talk  runs  something  like  this: 
"Well,  Mr.  Dealer,  I  am  sorry  you  cannot  see  it  as  we  do, 
and  realize  that  it  is  to  your  own  advantage  7iot  to  cut  prices. 
But,  if  you  persist  in  your  refusal,  I  am  going  to  ask  you  not 
to  order  any  of  our  goods.  In  that  event,  we  don't  want  your 
order,  and  really  you  don't  want  our  goods,  for,  if  you  began 
cutting,  all  your  competitors  would  have  to  do  the  same  thing, 
and  there  would  be  no  end  to  it.  You  are  selling  enough  soap, 
as  it  is,  upon  which  you  are  not  meeting  selling  expenses  or  are 
even  losing  money." 

It  is  to  be  noted  that  goods  are  not  directb/  refused  the  man. 
The  proposition  is  thus  never  taken  off  the  personal  basis, 
it  being  up  to  the  personal  integrity  of  the  dealer  to  do  The 
Square  Thing.  And  it  may  overjoy  the  optimist  and  the 
believer  in  the  sense  of  integrity  of  average  humanity  to  learn 
that,  in  the  case  of  this  soap  house,  it  is  said  that  not  one  dealer 
in  the  course  of  years  of  experience  has  failed  to  come  to  the 
chalk-mark  when  the  matter  has  been  put  to  him  on  this 
personal  basis. 

This  is  not  saying  that  there  have  not  been  violations,  how- 
ever, and  instances  of  price  cutting.  Such  instances  have  been 
easily  detected,  as  a  rule;  and  have  even  been  antici- 
Stronger    p^ted.     The  reputation  of  a  dealer  who  is  known  as 

Contract  a  price  cutter  Usually  goes  before  him.  His  contem- 
poraries will  give  him  away.  "x\re  you  selling  goods 
to  Jones?"  is  the  question  asked  by  Price-cutter  Jones's  com- 
petitor.    "Then  we  don't  want   any,  because  there  can't  be 


418        ADVERTISING  AS  A  BUSINESS  FORCE 

any  question  what  he  will  do."  Such  an  argument  is  met 
with  the  proposition  that,  if  the  competitor  will  telegraph, 
charges  reversed,  to  the  soap  house  the  first  time  Jones  is 
caught  cutting  prices,  and  agree  not  to  cut  in  the  interim  himself, 
the  soap  house  will  hustle  a  salesman  to  the  spot  by  the  very 
next  train  to  bring  Jones  to  terms.  Being  a  liberal  proposal, 
the  suggestion  is  usually  accepted,  and  thereupon  the  detective 
work  begins  and  continues  automatically. 

^Vhen  a  specific  instance  of  price  cutting,  contrary  to  the 
spoken-word  agreement,  is  shown,  the  first  possible  moment 
for  a  personal  interview  is  seized.  In  many  cases  the  man 
detected  in  the  act  of  cutting  prices  is  found  in  a  rather  pug- 
nacious mood  at  the  time  of  such  an  interview.  In  not  a  small 
percentage  of  cases  he  will  stoutly  deny  having  ever  agreed 
to  maintain  prices  anyway.  He  is  then  never  allowed  to 
believe  that  his  bluff  will  pass  for  an  instant.  "I  can  see  how 
it  may  be  possible,  Mr.  Dealer,"  says  the  salesman,  "that 
you  may  really  believe  you  never  made  an  agreement  not  to 
cut  prices,  but  I  am  absolutely  positive  that  you  did  give  your 
word  in  the  matter  —  I  have  not  the  least  shadow  of  a  doubt." 
Not  having  been  called  a  liar  in  so  many  words,  the  dealer 
will  then  usually  come  down  from  his  "high-horse,"  it  is  found, 
and  meekly  admit  that  "the  matter  may  have  slipped  his 
mind." 

Then  the  whole  proposition  is  approached  anew,  and  a 
second  spoken  pledge,  as  between  two  gentlemen,  is  asked. 
In  case  it  is  refused,  which  is  not  often,  a  little  "heavy  tradegy  " 
is  brought  to  bear  —  even  a  cuss  word  or  two  and  a  show  of 
valor  on  the  part  of  the  salesman.  "Oh,  well,"  says  the  latter, 
"if  that  is  the  kind  of  a  business  man  you  are,  sir,  and  if  that  is 
all  your  word  is  worth,  why,  all  right.  But  we  took  you  for 
a  gentleman."  It  is  the  Bullet  that  Hits  the  Invulnerable 
Spot.  Even  the  grimmest  dealer  has  a  sort  of  commercial 
Tendon  of  Achilles  where  he  is  sensitive.  It  is  self-respect, 
his  pride  in  his  personal  reputation  for  honesty  and  for  being 
a  man  of  his  word  and  an  honorable  man  among  men.  Sneer 
as  the  pessimist  may  at  this  manner  of  approach,  and  this  way 
of  doing  business,  yet  the  fact  remains,  and  it  is  testified  to  by 
the  commercial  philosopher  referred  to,  that  this  appeal  has 
never  yet  failed  to  reach  its  mark.  And  every  new  success 
naturally  makes  the  succeeding  one  the  easier. 

In  some  instances  a  slightly  different  angle  of  approach  is 


PRICE  MAINTENANCE  419 

taken  in  case  of  a  point-blank  refusal  to  maintain  price.  This 
manager  tells  the  story  of  how  he  lately  went  to  PittsjSeld, 
Mass.,  to  see  a  recreant  dealer,  and  sat  in  his  office,  in  company 
with  one  of  his  under-salesmen,  during  business  hours,  from 
11  o'clock  one  morning  until  the  next  noon  in  a  successful  effort 
to  bring  the  man  to  terms.  It  did  the  trick.  "Sometimes  it 
is  better  to  besiege  the  enemy  and  starve  them  into  submission," 
he  says  with  a  smile  of  reminiscence,  "than  it  is  to  attempt 
to  attack  them  directly  and  blow  them  to  smithereens.  That 
fellow  agreed  to  get  rid  of  us.  I'd  have  camped  out  there  a 
month  otherwise." 

This  same  personal  appeal  to  a  dealer's  sense  of  right  actions 
has  been  extensively  used  by  this  same  soap  house  along  a  little 
different  line  in  the  matter  of  sampling,  too.  One  of  its  recent 
big  moves  was  a  monster  appeal  through  the  mails  to  the 
consumer  whose  names  were  provided  by  the  dealers.  Along 
with  the  letter  to  them  went  a  coupon  redeemable  at  their 
dealer's  store  for  a  regulation-sized  cake  of  soap,  the  dealer 
having  been  provided  in  advance  with  the  latter  in  the  necessary 
quantities.  It  was  cheaper  to  provide  a  regulation-sized  cake 
than  to  make  up  a  special  smaller  one.  As  is  always  the  case, 
the  great  temptation  was  for  the  dealer  to  steal  these  sample- 
cakes,  assert  that  he  had  not  received  them  from  the  manufac- 
turer when  coupon-holders  came,  and  add  them  to  his  regular 
stock  of  salable  soap. 

"But  a  little  careful  argument  on  our  part,"  says  the 
manager,  "and  a  little  more  manipulation  of  the  Appeal- 
Personal,  sufficed  to  offset  this  dealer's  temptation. 
The  Effects  gy  personal  interviews  and  by  mail  we  explained 
AvveajT  ^^^  ^^  fully  appreciated  that  the  dealer  in  question 
'was  personally  above  any  such  practices,'  even  if 
it  were  not  for  the  fact  that  it  was  for  his  best  interests  in  the 
end  that  the  soap  should  be  given  out  as  originally  intended, 
as  samples.  We  explained  that  for  him  not  to  give  out  the 
soap  as  samples  would  mean  but  to  curtail  the  growth  of  his 
ultimate  sales  just  so  much  in  proportion  and  to  miss  the 
Golden  Opportunity.  And  the  appeal  struck  home  and, 
as  far  as  I  know,  the  sample-cakes  were  used  as  originally 
intended  in  every  case." 

In  this,  too,  too  legal  age  when  lawyers  in  grim  battalions 
and  safes  loaded  with  parchments  bearing  doubly  witnessed 
signatures  are  so  frequently  relied  upon  to  push  through  price 


420        ADVERTISING  AS  A  BUSINESS  FORCE 

protection  and  other  sales  policies,  it  seems  as  if  the  harking 
back  to  the  fundamental,  personal,  and  moral  appeal  is  both 
better  business  and  more  agreeable  and  optimistic.  It  is  cer- 
tainly true  that  a  better  feeling  must  exist  between  a  retailer 
and  a  manufacturer  whose  relations  are  put  on  the  plane 
of  pure  loyalty  and  honor  than  between  the  manufacturer 
who  hand  cuffs  dealers  with  steel  chains  of  legal  documents. 

Long  ago,  in  pedagogy,  it  has  been  established  that  you 
build  morality  cjuicker  lay  putting  questions  up  to  the  per- 
sonal honor  of  pupils  than  by  any  grim  systems  of  punish- 
ment and  rules.  Evidently  business  can  make  use  of  the  same 
principle. 

The  final  word  which  will  decide  whether  price  maintenance 
is  to  continue  as  a  trade  policy  or  whether  it  must  be  aban- 
The       doned  will,  in  the   long   run,   come   from   the   con- 
Consumer  gumer.     The  maker  of  breakfast  foods  may  convince 
Final      the    wholesaler    and    the    retailer    that    maintained 
Decision   prices  are   good  business,  but  as  long  as  the  con- 
sumer  feels    no   effective    moral    obligation    in     the    matter, 
and  is  ready  to  buy  his  goods  where  he  can  secure  them  at 
the  lowext  price,  any  price- maintenance  plan  is  bound  to  have 
elements    of    serious    weakness.     Louis    Kaminsky,    president 
of  the  Make-Man  Tablet  Company,  describes  his  experience 
in  attempting  to  influence  the  consumer   in  this   matter   in 
the  following  terms: 

*Our  direct  appeal  to  the  public  to  assist  us  in  maintaining 
our  fixed  selling  price  on  Make-Man  Tablets  will,  we  believe 
meet  with  their  hearty  approval.  The  congratulatory  ex- 
pressions which  have  reached  us  from  the  trade  convince 
us  that  they  are  in  perfect  accord  with  us  on  this  point.  These 
expressions  show  to  our  satisfaction  that  we  are  on  the  right 
track,  and  strengthen  our  determination  to  continue  our  policy 
of  strict  price  protection.  If  all  manufacturers  who  have 
a  fixed  price  on  their  products  should  follow  the  same  course 
of  reasoning  in  their  advertisements,  and  show  that  the  price 
fixed  by  them  on  their  goods  affords  the  retailer  only  fair 

*Pritderii''  Ink,  .January  3,  1911,  p.  40. 


PRICE  MAINTENANCE  421 

living  profits,  it  would  undoubtedly  result  in  obtaining 
more  readily  full  price  protection  on  all  articles  sold  by  drug- 
gists. 

It  must  not  be  overlooked  that  nearly  all  users  of  proprietary 
medicines  belong  to  that  class  to  whom  protection  is  constantly 
preached.  As  members  of  labor  organizations  they  seek 
to  protect  the  price  of  labor,  and  they  are  taught  that  it  is 
both  unwise  and  wrong  to  patronize  the  dealer  who  carries 
and  sells  unprotected  products  in  which  labor  enters  to  any 
extent.  A  direct  appeal  to  them  cannot  fail  of  results,  and 
these  results  should  be  beneficial.  It  is  our  intention  to  follow 
up  this  direct  appeal  to  the  public  in  all  our  future  general 
advertising.  While  this  may  not  bring  immediate  results 
we  believe  its  moral  effect  will  be  lasting. 

It  appears  that  the  public  has  a  mistaken  idea,  which  has 
grown  with  the  years  of  ignorance  and  misrepresentation, 
that  the  retail  druggist  is  the  only  man  in  any  branch  of  business 
who  always  makes  a  thousand  per  cent,  on  everything  he 
handles;  and  quite  naturally  the  public  felt  in  sympathy 
with  the  movement  of  price  cutting  on  proprietary  articles, 
for  they  reasoned  no  matter  what  a  druggist  sold  an  article 
for,  he  was  still  making  his  enormous  profit,  and  this  prevailing 
idea,  in  the  minds  of  so  many,  is  what  really  gave  price  demoral- 
izers the  support  which  they  have  received,  for  it  has  been 
their  object  to  leave  the  impression  with  the  public  that  they 
had  been  robbed  by  the  retail  druggists  in  the  past,  and  that 
they  had  come  as  a  savior  to  rescue  them  from  exorbitant 
prices. 

The  first  great  effort  that  the  retailer  should  aim  at  ought 
to  be  a  general  appeal  to  the  public,  through  newspapers  and 
otherwise,  that  the  average  profit  in  a  retail  drug  store  is  not 
as  large  as  it  is  in  the  average  retail  store  in  other  lines  of  busi- 


THE   EFFECTS   OF   PRICE   MAINTENANCE 

The  question  as  to  the  effect  on  the  volume  of  sales,  produced 
by  the  arbitrary  maintenance  of  a  price,  is  one  which  has  never 
ceased  to  offer  a  field  for  speculation.  The  following  discussion 
of  this  subject  gives  the  views  of  "  The  Advertising  Manager 
of  a  Widely-known  Toilet  Specialty  "  whose  name  is  not  given : 


422        ADVERTISING  AS  A  BUSINESS  FORCE 

In  a  recent  issue  of  Printers'  Ink  Jesse  Straus,  of  Macy's, 
gave  your  readers  a  most  interesting  article  concerning  price 
cutting  from  the  standpoint  of  the  big  department  store  using 
price  as  its  principle  argument  to  win  trade. 

Most  of  our  readers  will  probably  disagree  with  Mr.  Straus 
in  many  particulars,  assuming  that  a  price-protected  article 
gains  the  closer  co-operation  of  the  dealers  as  a  whole  because 
of  the  assured  profit. 

But  let  us  consider  this  matter  now  from  the  standpoint 
of  the  manufacturer  of  an  article  simply  protected  by  trade- 
mark, and  not  by  patent,  and,  therefore,  exposed  to  the  army 
of  imitators  who  are  always  ready  to  step  in  and  take  advantage 
of  a  demand  created  by  some  one  else.  There  are  many  manu- 
facturers of  trade-marked  goods  in  the  drug,  food,  and  other 
fields  who  do  not  believe  in  forcing  the  consumer  to  pay  the 
big  dealer  what  amounts  in  his  case  to  an  abnormal  profit 
simply  that  the  little  dealer  may  make  what  for  him  is  a  normal 
profit. 

The  theorist  says,  "The  manufacturer  ought  to  protect 
the  little  fellow,  otherwise  he  cannot  exist."  But  from  a 
practical  standpoint  does  the  manufacturer  want  the  little 
fellow  to  exist.''  Aren't  there  hundreds  and  thousands  of 
small  retail  stores  in  every  class  of  business  which  have  no 
reason  for  existence.'^  Wouldn't  the  manufacturers,  the  dealers 
themselves,  and  the  consumers  all  be  better  off  if  all  retail 
merchandising  could  be  concentrated  in  one  half  or  one  quarter 
the  number  of  stores  now  struggling  to  make  both  ends  meet.^ 

The  manufacturer's  problems  of  distribution  and  of  selling 
would  be  simplified,  the  retailers  left  in  business  would,  by 
their  increased  volume  of  trade,  be  able  to  reduce  selling  expense 
and  be  able  to  give  better  service  than  it  is  possible  for  the 
small  store  to  give. 

It  is  a  noticeable  fact  that  in  all  lines  the  small  dealer  is 

the  one  who  talks  most  about  the  advantage  of  price  protection; 

the  dealers  with  the  really   "worth  while"  business 

Protecting  £ggj  that  they  are  able  to  conduct  their  own  affairs 

the  bmall  i  i       .1     •  •  -.i         .    j-   j.    j.-  j 

Dealer  ^^^  make  their  own  prices  without  dictation  or  ad- 
vice from  outside  sources.  The  small  dealer,  on  the 
other  hand,  isn't  strong  enough  to  bear  the  brunt  of  the  battle  for 
business  alone;  he  not  only  lacks  output,  but  he  lacks  capital 


*Printers'  Ink,  August  25,  1910,  p.  8. 


PRICE  MAINTENANCE  423 

and,  as  a  rule,  lacks  business  acumen.  He  is  not  the  man  the 
manufacturer  must  look  to  for  a  really  profitable  business. 
By  protecting  his  prices,  the  manufacturer  may  get  the  good- 
will of  trade  of  this  class  but  it  won't  help  him  with  the  big 
dealer,  who  in  most  cases  opposes  any  plan  that  puts  him  on 
an  equal  footing  with  the  little  dealer  with  his  small  capital, 
his  imperfect  organization,  and  his  general  business  incom- 
petency. 

Then,  too,  there  is  the  public's  side  of  it.  Most  advertised 
specialties  are  in  a  certain  sense  luxuries.  Luxuries  are  largely 
purchased  by  those  who  can  afford  them,  and  the  lower  the 
price  of  the  luxury  to  the  consumer  the  wider  its  field  of  sale. 
It  is  a  case  of  "the  higher,  the  fewer." 

Nearly  every  advertised,  trade-marked  specialty  has  its 
unadvertised,  untrade-marked  imitators  selling  at  lower  prices 
than  the  original.  If  the  advertised  article  is  price  protected, 
and  the  imitation  is  sold  for  considerably  less,  price  protection 
makes  the  difference  in  the  cost  to  the  consumer  between  the 
original  and  the  imitation  a  pretty  strong  factor. 

In  proof  of  the  writer's  opinion  that  price  maintenance  by 
raising  the  cost  to  the  consumer  tends  to  decrease  the  con- 
sumption of  an  advertised  specialty,  I  have  only 
The  to  state  the  actual  experience  of  the  trade-marked 
Relation    toilet  specialty  advertised  by  my  firm.     In  those  cities 

to  the     where  price  agreements  exist  between  dealers  them- 

Volume    selves  —  where  all  are  getting  "  full  prices  "  —  our  per 

of  Sales  capita  sales  without  exception  are  the  smallest.  In 
the  cities  and  towns,  where  cut  prices  are  in  vogue 
our  per  capita  sale  is  the  largest,  though  concentrated  in  fewer 
stores. 

In  the  full-price  town  the  rank  and  file  of  small  dealers  are, 
indeed,  "more  friendly,"  but  this  friendship  doesnt  show  up  in 
their  sales.  In  the  cut-price  town  the  rank  and  file  are  "un- 
friendly"—  all  advocating  and  advising  "price  protection" 
—  but  in  those  towns  the  sales  of  the  few  big  dealers  selling  our 
product  on  a  comparatively  small  margin  are  so  large  and  so 
satisfactory  as  to  make  us  almost  willing  to  forget  that  the 
small  dealers  are  there  at  all. 

Another  thing  which  makes  "price  protection"  a  poor  business 
policy  for  the  advertised  specialty  —  that  is  the  unpatented 
specialty  —  is  the  opportunity  it  affords  the  dealer  to  make 
an  abnormal  profit  on  the  imitations.      For  example,  suppose 


4!24        ADVERTISING  AS  A  BUSINESS  FORCE 

"Mrs.  Blank's  Face  Cream"  is  a  widely  advertised,  price- 
protected  article,  and  suppose  the  retail  selling  price  is  fixed 
and  advertised  at  50  cents.  The  dealer  with  his  cheap  and 
inferior  "own  label"  face  cream  sees  a  chance  to  make  a  harvest 
by  just  under-selling  Mrs.  Blank's  cream  a  trifle  or  even 
getting  the  same  price  for  both. 

How  can  he  do  it?  The  druggists,  and  dealers  in  other  lines 
to  a  lesser  degree,  located  in  residential  districts  or  in  small 
towns,  have  enough  personal  influence  with  at  least  50  per 
cent,  of  their  trade  to  divert  a  considerable  demand  for  Mrs. 
Blank's  cream  to  their  own  kind.  The  dealer  has  a  big  incentive 
to  do  this  because  Mrs.  Blank's  advertised  and  protected 
price  has  established  a  face  cream  value  which  enables  him 
to  sell  his  own  label  product  for  possibly  300  per  cent,  profit 
as  compared  with  75  per  cent,  on  Mrs.  Blank's. 

In  other  words  price  protection  is  more  than  likely  to  defeat 
its  own  object  and  increase  rather  than  decrease  attempts 
at  substitution.  It  enables  the  dealer  to  charge  much  higher 
prices  for  the  imitation  than  we  would  charge  or  could  get  were 
it  not  for  the  known  price  of  the  original. 

I  am  aware  of  the  fact  that  these  ideas  are  radical  in  the 
extreme,  and  some  of  your  readers  w^ll  probably  say  that  the 
principles  advocated  give  the  small  dealer  little  chance  to  make 
a  living.  I  admit  that  my  facts  —  for  they  are  facts  and  not 
theories  —  make  no  allowance  for  sentiment.  Business  under 
present-day  conditions  is  a  "cold-blooded"  proposition,  and 
price  protection  for  the  trade-marked  but  not  patented  specialty 
is  pure  sentiment,  a  positive  handicap  in  creating  a  maximum 
sale  of  such  products. 

After  this  presentation  of  some  of  the  main  arguments  for 
and  against  the  price- maintenance  policy,  it  may  be  only  fair 
to  give  the  advocates  of  the  policy  one  final  word  "  in  rebuttal." 
L.  B.  Jones,  advertising  manager  of  the  Eastman  Kodak 
Company,  of  Rochester,  N.  Y.,  sums  up  the  arguments  in  favor 
of  price  maintenance  from  the  standpoint  of  manufacturers, 
retailer,  and  consumer,  as  follows : 

*Does  the  restriction  of  retail  prices  benefit  or  injure  the 
public? 

*Printers   Ink,  May  4,  1911,  p.  2. 


PRICE  MAINTENANCE  425 

The  right  of  the  manufacturer  to  maintain  a  restricted  price 

policy  must,  in  the  last  analysis,  depend  upon  the  answer  to 

that    question.      If    such    price   restriction   actually 

Pnce  -'^^fl^^- throttles  competition,  it  is   a  bad  thing  —  if,  on  the 

the  Public  other  hand,  it  encourages  competition  in  quality  and 

in  service,  it  is  a  good  thing. 

There  is  more  than  one  kind  of  commercial  competition. 
There  is  competition  in  price,  with  its  ever  attendant  danger 
of  loss  in  quality.  There  is,  where  established,  maintained, 
and  published  prices  prevail,  a  healthy  competition  in  quality. 
The  former  is  sometimes  and  the  latter  almost  universally  to 
the  benefit  of  the  ultimate  consumer. 

The  manufacturer,  who  restricts  the  prices  at  which  his 
goods  are  to  be  retailed  to  a  certain  figure,  is  just  as  much  in 
competition  with  other  manufacturers  of  similar  goods  as  are 
those  who  do  not  restrict  prices  —  but  in  a  more  healthful 
way.  Bear  in  mind,  however,  that  this  discussion  refers  only 
to  an  individual  concern  or  corporation  —  not  to  a  combination 
between  natural  competitors  to  create  an  artificial  price. 
That's  another  and  quite  foreign  subject,  though,  unfortunately, 
likely  to  be  confused  by  some  people  with  the  real  question  at 
issue. 

The  manufacturer  who  publishes  a  price  list  on  his  goods, 
allows  a  certain  discount  to  the  dealer  in  those  goods  and 
then  insists  on  that  dealer  selling  his  goods  at  the  list  price, 
is  by  no  means  free  from  competition.  If  he  sells  wisely,  he  has 
familiarized  himself  with  the  average  percentage  that  it  costs 
the  dealer  to  handle  his  goods,  and  he  makes  his  discount 
large  enough  to  pay  the  dealer  a  normal  profit  —  a  profit  that 
will  be  satisfactory  to  him,  but  not  big  enough  to  prove  a 
constant  temptation  to  cut  prices.  In  making  his  list  price, 
this  wise  manufacturer  will  put  it  at  a  figure  that  will  pay  him 
a  normal  profit,  after  giving  a  discount  to  the  dealer  that  will 
likewise  pay  him  his  normal  profit.  Such  manufacturer  is  as 
much  in  competition  with  other  makers  of  goods  as  though 
he  had  no  established  price  —  but  his  consumer  customers 
get  a  square  deal;  they  all  buy  his  goods  at  the  same  price. 

The  retailer  must  make  a  certain  percentage  of  profit  over 
and  above  the  cost  of  doing  business  or  go  into  bankruptcy. 
Isn't  it  manifestly  fairer  to  the  consumer,  if  the  dealer  nets 
5  per  cent,  on  what  he  sells  to  Smith  and  5  per  cent,  on 
what  he  sells  to  Brown  than  it  is  for  him  to  lose  5  per  cent. 


426        ADVERTISING  AS  A  BUSINESS  FORCE 

on  what  he  sells  Brown  and  make  it  up  by  netting  10  per 
cent,  on  what  he  sells  Smith?  And  that's  just  what  happens 
every  day  where  retail  prices  are  restricted.  Every 
^^'  ^f?  retailer  knows  this,  though  the  buying  public  does 
fixed  Price  ^^^'  The  restricted  price  plan  is,  in  fact,  particu- 
larly favorable  to  the  small  consumer,  the  man  whom 
the  courts  are  ostensibly  trying  to  protect.  It  has  been  decreed 
that  the  railroads  shall  not  discriminate  against  the  small  shipper 
by  giving  a  lower  rate,  whether  directly  or  by  rebate,  to  the 
big  shipper  than  the  small  shipper  enjoys. 

Carried  to  its  logical  conclusion,  the  price  restriction  policy 
means  the  same  thing.  All  retail  purchasers  are  treated  alike. 
It  means  the  square  deal. 

And  how  is  the  manufacturer  affected.  He  has  a  widely 
advertised  article  at,  say,  ten  dollars.  It  is  generally  known 
that  his  goods  are  sold  at  list  price  only.  The  dealer 
From  the  is  already  receiving  a  normal  discount.  This  manu- 
Manufac-  fact^j-er  usually  keeps  ahead  in  improvements  in  his 
Standpoint  ^i'^^'  b^^^'  ^^^  ^^^  sake  of  argument,  we  will  admit 
that  a  competitor  announces  an  important  and 
genuine  improvement.  What  happens?  One  of  three  things: 
An  improvement  in  the  article  in  question  to  meet  the  competi- 
tion, a  cut  price  in  order  to  pick  up  the  cheaper  trade  in  this 
line,  or,  if  the  margin  of  profit  will  not  admit  this,  an  entire 
abandonment  of  the  manufacture  of  such  article.  In  cutting 
the  price,  if  that  method  be  followed,  the  price  at  which  the 
goods  are  to  be  retailed  may  still  be  restricted  at  whatever 
lower  level  may  be  decided  upon  as  a  normal  price  at  the  new 
level  forced  by  the  competitig  improved  product.  Price  restriction 
has  in  no  way  prevented  a  general  lowering  of  price;  it  has 
simply  maintained  a  uniform  price. 

A  restricted  price  means  that  the  goods  are  to  be  sold  at 
a  certain  price,  that  the  retailer  is  not  to  go  either  above  or 
below  that  price;  but  if  the  established  price  is  abnormally  high 
for  the  quality  of  the  goods,  it  cannot  live.  No  mere  restricting 
of  price  can  annul  the  laws  of  supply  and  demand  or  of  com- 
mercial competition.  Indeed,  goods  that  are  sold  at  known 
prices  offer  themselves  to  the  keenest  competition  because 
it  is  so  easy  for  the  manufacturers  of  competing  articles  to 
figure  just  what  can  and  must  be  done. 

The  result  is  that  the  manufacturer  of  restricted  price  goods 
is  alive  to  the  fact  that  he  must  constantly  back  up  his  prices 


PRICE  MAINTENANCE  427 

with  quality.  He  is  averse  to  changing  his  methods  or  permit- 
ting the  retailers  to  change  their  methods  of  handling  his  goods, 
because  he  takes  an  honest  pride  in  his  one-price-to-all  policy. 
The  result  is  a  constant  effort  to  better  his  products,  a  constant 
effort  to  give  his  customers  more  for  their  money.  It  is  a 
competition  just  as  keen  and  far-reaching,  as  bitter  if  you  like, 
as  a  competition  in  price-cutting.  Because  one  manufacturer 
of  automobiles  restricts  the  retail  price  of  his  car  to  $4,000, 
another  to  $3,000,  another  to  $2,000,  and  another  to  $1,000 
does  any  one  maintain  that  there  is  no  competition  in  auto- 
mobiles? And  similarly  there  is  competition  between  dealers 
even  though  they  maintain  prices  —  a  competition  in  service 
to  their  customers  that  makes  or  ruins  their  business,  and, 
locally,  the  business  of  the  concerns  whose  cars  they  handle. 

Take  hats.  Dunlap  and  Knox  derbies  are  restricted  at  five 
dollars.  You  can't  buy  one  for  less,  yet  you  can  buy  a  pretty 
good-looking  derby  for  a  dollar  and  a  better  one  for  two  dollars, 
and  sometimes  really  good  for  three.  But  Dunlap  and  Knox 
are  by  no  means  free  from  competition.  It's  a  competition 
of  quality.  They  just  put  style  and  goodness  into  their  hats, 
else  men  would  buy  the  cheaper  ones.  They  compete  with 
each  other  and  with  the  imported  hats  and  with,  perhaps,  come 
other  five-dollar  hats.  They  compete  with  the  cheaper  hats 
by  offering  better  style  and  quality.  But  it  would  be  absurd 
to  say  that  hats  cost  more  because  Knox  and  Dunlap  don't 
permit  the  retailer  to  cut  prices  on  their  goods  until  the  season 
is  over. 

To  the  careful  observer  there  can  be  but  one  conclusion 
as  to  the  merits  of  the  policy  of  price  restriction.  That  policy 
means  a  square  deal  to  the  ultimate  consumer.  It  means  that 
one  man's  money  is  as  good  as  another's.  It  means  that  those 
manufacturers  who  adopt  the  policy  must  make  good  goods 
in  order  to  maintain  their  prestige,  must  be  ever  on  their 
mettle  to  anticipate  competition,  must  forestall  it  by  making 
improvements  and  making  them  before  the  other  man  does. 
The  market  is  still  open  for  those  who  do  business  on  the  other 
basis,  but  if  their  goods  do  not  equal  or  better  the  restricted 
price  goods  the  public  will  buy  the  restricted  price  goods. 

Competition  began  with  commerce.  Competition  must 
continue  to  exist  so  long  as  there  are  two  or  more  separate 
concerns  manufacturing  similar  goods  for  the  same  market. 
If  one  of  these  concerns  makes  highly  superior  goods  and  is 


428        ADVERTISING  AS  A  BUSINESS  FORCE 

equally  alert  in  its  selling  methods,  it  will,  by  reason  of  the  \i\\\ 
of  the  survival  of  the  fittest,  get  the  big  share  of  the  trade. 
Whether  prices  are  restricted  or  not  has  nothing  to  do  with 
the  case  further  than  the  fact  that  the  concern  that  makes 
the  goods  of  know'n  quality  is  in  a  position  to  make  its  prices 
known  and  stick  to  them.  Having  cjuality,  it  can  afiPord  to 
compete  on  a  quality  basis.  No  underhanded  methods  by 
which  one  customer  is  gained  at  the  expense  of  another  need 
be  resorted  to. 

The  price  restriction  policy  means  a  square  deal  for  the 
consumer,  a  reasonable  profit  to  the  dealer,  and  a  constant 
effort  toward  betterment  of  the  product  on  the  part  of  the 
manufacturer. 

REVIEW   QUESTIONS  —  CHAPTER   XII 

1.  How  does  price  maintenance  affect  the  advertising  man? 

2.  What  is  the  basis  of  price?  What  part  does  distribution 
cost  play? 

3.  What  are  the  dangers  from  bad  choice  of  price  policy? 

4.  What  are  the  best  arguments  for  price  maintenance: 
(1)  From  the  standpoint  of  the  manufacturer?  (2)  The 
jobber?     (3)     The  retailer?     (4)     The  consumer? 

5.  What  are  the  strongest  arguments  against  it  in  each  case? 

6.  How  does  price  maintenance  affect  the  volume  of  sales? 


CHAPTER  XIII 

DISPOSAL  OF   ADVERTISING   COSTS 

THE  question,  "Who  pays  for  advertising?"  is  often 
discussed  and  seldom  with  any  profit.  The  fruitlessness 
of  these  discussions  is  more  often  due  to  lack  of  a  clear 
statement  of  the  problem  than  to  any  other  single  cause.  Before 
any  such  discussion  has  gone  far  it  often  becomes  clear  that 
neither  the  term  "pays"  nor  the  term  "advertising"  represents 
identical  ideas  in  the  minds  of  the  disputants. 

It  is  generally  agreed  that  the  direct  outlay  for  advertising 
the  United  States  runs  far  over  $600,000,000  a  year,  and  there 
is  a  very  strong  temptation    to    undertake   to   say 
Who  Pays  categorically   that   that   amount  comes  directly  out 
Advertising  of  the  pockets  of  some  one  element  of  the  distribution 
system.     We  have   been   told  many  times  that  this 
bill    is    paid    by    the    consumer.     Somewhat    less    frequently, 
but   with  equal  emphasis,  it   has  been  declared  that  the  com- 
petitor who  does   rot  advertise   foots  the    advertising  bill  of 
the  man  who  does.       And   these  are  only  two  of  many  ex- 
planations. 

It  wall  not  be  the  purpose  of  this  chapter  to  undertake  to 
close  this  interesting  question.  The  most  that  will  be  under- 
taken will  be  a  suggestion  as  to  what  ought  to  be  clearly  under- 
stood by  "paying"  and  by  "advertising"  before  any  attempt 
to  answer  the  question  is  made. 

WHAT   IS   MEANT   BY    " PAYING" 

Let  us  take  the  hypothetical  case  of  a  hardware  manufacturer 
with  a  going  plant  and  an  established  distribution,  having 

429 


430        ADVERTISING  AS  A  BUSINESS  FORCE 

among  his  products  a  patented  stove-cover  lifter  retailing 
at  25  cents.  This  specialty  never  has  been  specially  advertised, 
and  it  has  been  handled  as  a  side  line,  sold  in  connection  with 
other  products  of  the  concern.  The  output  is  100,000  a  year. 
The  price  to  the  retailer  is  15  cents,  and  to  the  wholesaler 
10  cents,  and  the  actual  cost  of  production  based  on  an  out- 
put of  100,000  is  7  cents  each.  The  elements  of  production 
and  distribution  cost  could  then  be  represented  roughly  by 
Fig.  A. 

Now   suppose   the    manufacturer,   who   has   been    figuring 

on  a  net  profit  of  3  cents  on  each  lifter  decides  to  spend  two 

thirds  of  this  profit  in  advertising  this  lifter.     Until 

Doubled     ^j^^^^  advertising  produces   some  kind  of  a  tangible 

and        result  we  can  represent    it    as  coming  entirely   out 
^'Sf "  of  the  manufacturer's  profits  (Fig.  B). 

But  suppose  this  outlay  has  been  so  judicious  as  to 
double  the  original  demand  and  raise  the  output  to  200,000  lifters 
instead  of  100,000.  By  doubling  his  output  the  manufacturer 
can  produce  each  lifter  at  a  reduced  cost.  If  we  call  this  new 
cost  5  cents,  instead  of  the  original  7  cents,  we  see  that  the 
net  profit  on  each  lifter  after  paying  for  the  advertising  is 
restored  to  3  cents  (Fig.  C)  as  it  was  before  the  advertising. 
But  with  the  same  net  profit  on  each  lifter  and  a  doubled  output 
the  manufacturer's  total  profit  is  doubled. 

At  the  same  time  the  doubled  business  due  to  the  adver- 
tising has  produced  similar  effects  in  the  distribution  system. 
The  wholesaler's  expense  of  doing  business  on  each 
Effects  on  Jifter  on  a  basis  of  100,000  produced  was  2  cents.  But 
tion  Costs  if  the  volume  of  the  business  be  doubled  (supposing 
the  increase  to  be  distributed  proportionately  among 
the  wholesalers)  each  wholesaler  handling  the  lifter  will 
find  some  reduction  in  his  cost  of  doing  business  on  each 
lifter  sold.  His  saving  will  not  be  as  large  as  that  of  the  manu- 
facturer, but  his  expense  will  be  reduced.  And  the  same  is  true 
of  the  retailer  (Fig.  D). 


DISPOSAL  OF  ADVERTISING  COSTS  431 


Price  to  Consumer  25 
Price  to  Retailer  15 
Price  to  Wholesaler  10 


P.C. 

3 


P. 

3 


E/ 

2 


P/ 

3 


E.' 
6 


P." 
4 


Figure 

4- 

-  Before  advertising. 

A, 

P 

ii 

2 

1 

Figure  B  —  Advertising  cost  taken  from  manufacturer's  pro6t. 


P.C. 

2i 


A. 

2 


P. 

3 


Figure  C  —  Increased  production  lowers  production  costs,  absorbing  adver- 
tising cost. 


D 


E.' 

U 


P.' 


E." 

4i 


P." 

5| 


Figure  D  —  Increased  production  lowers  distribution  costs. 
Price  to  Consumer  18 
Price  to  Retailer  \\\ 
Price  to  Wholesaler  8i 


E 


P.C. 

B 

s. 

G 

A. 

P. 

E.' 

P.' 

E." 

P." 

2| 

3 

U 

3 

4 

2 

H 

H 

U 

4| 

2 

Figure  E — Effect  of  lowered  price  on  costs  and  profits. 


432        ADVERTISING  AS  A  BUSINESS  FORCE 


OUTPUT 

100,000 

OUTPUT 

200,000 

Fig. 
1 

Fig. 

2 

Fig. 
3 

Fig. 
4 

Fig. 
5 

P.C. 

Manufacturer 

Prime  cost 

3 
1 

2 

1 

3 

3 
1 

2 

1 
2 
1 

2i 

3 

4 

u 

3 

4 

2 
3 

2i 

3 

4 

u 

3 

4 

2 
3 

2i 

B. 

S. 

Burden 

Special  selling 

3 

4 

u 

G. 
A. 
P. 

General 

Advertising 

Profit 

3 

4 

2 

Price  to  wholesaler 

10 

10 

10 

10 

8-J 

E' 
P' 

\Miolesaler 

Cost 

Expense  of  doing  business  . 
Profit 

10 

2 
3 

10 
2 
3 

10 

10 

U 

3^ 

8i 

Price  to  retailer 

15 

15 

15 

lu 

E" 
P" 

Retailer 

Cost 

Expense  of  doing  business. 
Profit 

15 
6 
4 

15 
6 
4 

15 

5\ 

2 

Price  to  consumer 

25 

25 

25 

18 

Each  of  these  cases,  so  far,  presupposes  that  all  prices  are  to  be 
maintained  —  10  cents  to  the  wholesaler,  15  cents  to  the  retailer, 
and  25  cents  to  the  consumer.  So  long  as  the  prices  are  main- 
tained and  demand  is  not  weakened  each  handler  of  the  goods 
makes  more  total  profit  when  the  output  is  increased.  Some  of 
this  increase  is  due  to  decreased  selling  expense  per  lifter,  and 
some  to  the  greater  volume  of  sales.  In  the  case  of  the  whole- 
salers we  see  that  the  actual  profit  margin  has  increased  from 
3  to  3^  cents  on  each  lifter,  and,  with  the  number  of  sales 
doubled  it  appears  that  the  wholesaler  is  making  7  cents  out  of 
this  lifter  trade  where  he  formerly  made  3  cents.  By  the  same 
process  the  retailer's  total  profit  has  increased  from  4  cents  to 
two  times  5|  cents,  or  11  cents. 

Thus  the  manufacturer  is  making  as  much  as  he  did,  before 


DISPOSAL  OF  ADVERTISING  COSTS  433 

advertising,  on  each  lifter,  and  twice  as  much  on  the  entire 
business.  And  the  wholesaler  and  retailer  are  each  making 
more  on  each  article  and  are  selling  twice  as  many.  The 
consumer,  on  the  other  hand,  is  paying  no  more  than  he  did 
before.  Now  the  question  is,  who  is  "paying"  for  the  adver- 
tising in  this  case? 

And   now  suppose  that,  through  one  cause  or  another,  the 

prices   are  reduced  (Fig.  E)  to    18    cents    to    the    consumer, 

11|  cents  to  the  retailer  and  8|  cents  to  the  wholesaler. 

If  Prices  The  output  now  being  at  200,000  with  corresponding 

Recdued   costs,  the   price   reduction  leaves  to  each  of   these 

handlers  of  the  goods,  and  to  the  manufacturer,  only 

one  half  of  the  profits  they  originally  made  on  each  piece.     But 

each  is  selling  twice  as  many  as  he  did  originally  and  hence 

is  making  total  profits  which  are  exactly  the  same  as  those 

they   were   making    before    the    advertising.     The    consumer, 

however,  is  now  paying  7  cents  less  for  lifters  than  he  did 

originally.     The  question  as  to  who  "pays"  now  takes  on  an 

entirely  different  aspect. 

We  now  see  that  the  problem  of  "paying"  for  the  advertising 
has  to  do,  not  only  with  the  actual  outlay  for  advertising, 
but  also  with  the  relation  between  that  outlay  and  the  reduction 
in  manufacturing  and  distribution  costs  coming  from  the 
increased  demand  which  that  outlay  produces. 

And  this  case  takes  no  account  of  the  potential  future  re- 
ductions of  the  same  kind  which  may  follow  from  new  demand 
which  has  been  aroused  by  the  advertising  but  which  is  not 
yet  converted  into  sales.  Nor  has  any  account  been  taken 
of  the  effect  of  this  stimulation  of  demand  for  one  single  manu- 
facturer's output  upon  the  trade  of  his  competitors.  And  these 
are  only  two  out  of  many  other  factors  which  have  been  left 
out  of  this  case  for  the  sake  of  making  this  one  point  clear.* 


*Throughout  this  case  we  have  given  attention  only  to  advertising  by  the 
producer.  It  will  make  profitable  exercise  work  to  develop  similar  diagrams 
showing  the  efiFects  of  advertising  by  wholesalers  and  retailers. 


434        ADVERTISING  AS  A  BUSINESS  FORCE 

No  one  can  say  who  has  paid  for  any  piece  of  advertising 
outlay  until  he  knows  what  has  been  its  effect  on  demand  — 
and  consequently  on  production  and  distribution  costs,  and 
on  production  and  distribution  profits. 

George  Frank  Lord,  writing  under  the  title  "Manufacturer's 
and  Dealer's  Margins  of  Profit,"  brings  out  some  of  these 
points  quite  conclusively.  He  makes  it  perfectly  clear  how,  in 
concrete  cases,  effective  advertising  has  brought  about  an 
actual  reduction  in  manufacturing  and  distribution  costs : 

*This   is   a  subject  of   vital   interest  to   every   advertising 

man,  manufacturer,    and   merchant.     In  order  to   consider   it 

with  a  clear  mind  it  is  first  necessary  to  realize  the 

Manufac-  difference  between  "margin  of  profit"  and  "margin 

%mleTJ^  for  profit." 

Margins       Margin  of  profit  is  the  net  percentage  or  portion 

of  Profit  of  the  selling  price  of  an  article  that  accrues  to  the 
seller,  after  all  his  selling  expense  has  been  deducted. 
Margin  for  profit  is  the  gross  difference  between  the  selling 
price  and  the  cost  price. 

One  of  the  chief  reasons  for  the  "substitution  evil"  is  the 
failure  of  the  average  dealer  to  appreciate  the  above  distinction. 

One  of  the  chief  reasons  why  some  manufacturers  do  not 
advertise  is  because  they  do  not  appreciate  the  difference. 

A  manufacturer  of  a  patent  medicine  costing  10  cents  a  bottle, 
wholesaling  at  67  cents  and  retailing  for  $1,  has  a  gross 
margin  for  profit  of  57  cents.  If  he  spends  50  cents  per  bottle 
for  advertising  and  all  other  selling  expenses,  his  net  margin 
of  profit  is  7  cents  a  bottle. 

The  dealer  or  druggist  buys  at  67  cents.  If  he  maintains 
the  list  price  of  $1  his  margin  for  profit  is  33  cents.  His 
net  margin  of  profit  is  33  cents  less  any  variation  from  list 
price,  less  the  proportionate  charge  against  this  sale  for  store 
rent,  clerk  hire,  and  miscellaneous  expenses.  Therefore,  his 
net  margin  may  be  15  cents,  or  nothing,  or  a  minus  quantity, 
depending  entirely  on  how  much  it  costs  to  sell  the  medicine. 

It  is  obvious  that  the  sale  of  any  article  involves  a  selling 
expense. 

The  difference  between  the  manufacturing  cost  of  an  article 

*Printers  hik,  October  20,  1910,  p.  28. 


DISPOSAL  OF  ADVERTISING  COSTS  435 

and  its  retail  price  is  what  the  consumer  pays  for  the  cost  of 
selling  and  delivering  the  article  to  him,  and  the  profits  of  the 
manufacturer,  dealer,  and  any  other  middlemen  involved. 

No  scheme  of  trading  has  ever  been  devised  that  eliminates 
the  important  item  of  selling  cost.  Various  schemes  have  been 
used  to  reduce  it  to  a  minimum. 

The  one  great  advantage  of  advertising  is  that  it  reduces 
selling  cost  by  creating  an  increased  demand  without  propor- 
tionate increase  in  annual  or  total  selling  expense. 

The  selling  expense  per  sale  may  be,  and  frequently  is, 
greater,  but  not  on  the  total  volume  of  business  done  per  year. 

Suppose  a  dealer  sells  a  non-advertised  article  for  $1  at 
a  gross  margin  of  33  cents  profit,  and  he  sells  500  a  year.  Then 
his  annual  gross  profit  on  this  article  is  $165.  But  his  net 
profit  may  be  only  $65  owing  to  the  proportion  of  rent,  insur- 
ance, local  advertising,  etc.,  that  must  be  charged  against  this 
article,  plus  the  cost  of  the  amount  and  quality  of  salesmanship 
required  to  sell  it. 

Now,  if  this  article  is  well  advertised  by  the  manufacturer, 

and  the  wholesale  price  raised  to  75  cents,  it  is  a  fallacy  for 

the  dealer  to  figure  that  his  profits  on  this  article  are 

If  the     reduced.     He  will  probably  sell   1,000  at  an  annual 

TVere      g^'oss  profit  of  $250  and  a  possible  expense  of  $100, 

Raised  leaving  $150  net  profit  as  against  $65  of  the  year 
before. 

The  same  argument  applies  to  the  manufacturer.  If,  during 
the  first  year,  the  article  cost  to  manufacture  50  cents,  and 
wholesaled  for  67  cents,  his  gross  profit  per  article  would  be 
17  cents.  And  if  he  sold  100,000,  his  gross  annual  profit  would 
be  $17,000.  If  his  salesmen's  and  shipping  cost  amounted 
to  $12,000  his  net  profit  would  be  only  $5,000. 

If,  in  the  second  year,  he  spends  $20,000  in  advertising,  and 
sells  200,000  instead  of  100,000,  his  gross  margin  of  profit  at 
the  new  wholesale  price  will  be  $50,000,  provided  he  has  saved 
nothing  in  manufacturing  cost.  But  as  is  well  known,  doubling 
the  output  of  a  factory  largely  reduces  manufacturing  cost, 
and  it  is  probable  that  his  would  be  reduced  to  at  most  40  cents. 
Hence  his  annual  gross  profit  would  be  $70,000  and  his  net 
profit  $70,000  less  $20,000  advertising,  less  perhaps  $20,000 
salesmen's  and  shipping  cost,  or  $30,000  net  profit  as  against 
$5,000  the  first  year. 

Note  that  in  the  first  year  his  net  profit  was  $5,000  or  5  cents 


436        ADVERTISING  AS  A  BUSINESS  FORCE 

per  article,  and  that  in  the  second  year  he  spends  10  cents 
an  article  for  advertising,  or  twice  the  amount  of  the  previous 
year's  net  profit  per  article.  Yet  he  winds  up  the  second  year 
with  $15,000  more  profit  than  the  first  year. 

It  is  the  failure,  in  many  cases,  of  both  dealer  and  manufac- 
turer to  understand  the  seeming  paradox  indicated  by  the 
foregoing  figures  that  causes  the  former  to  be  a  substituter 
and  a  "knocker"  of  advertised  goods,  and  the  latter  to  hesitate 
about  becoming  an  advertiser. 

The  point  for  both  to  keep  in  mind  is  that  dividends  depend 
not  so  much  on  profits  per  sale  as  the  net  annual  profits  of 
the  business  as  a  whole. 

J.  George  Frederick,  in  a  discussion  of  selling  cost  and  the 
factors  that  reduce  it,  gives  some  concrete  cases  of  the  effect 
of  advertising  upon  the  costs  of  distributing  goods : 

*If  the  muckrakers  ever  stumble  on  to  the  facts  about  the 
selling  expense  of  some  concerns,  there  will  be  a  series  of  sharp 
literary  explosions. 

There  is  a  manufacturing  concern  in  New  York  whose 
product  is  enjoying  an  international  market,  and  is  regarded 
as  having  achieved  success  in  every  way  —  yet  its  selling  cost  is 
still  five  times  its  Tnaniijacturing  cost! 

Now  if  this  product  were  a  luxury,  or  even  a  specialty  or 
novelty  as  yet  not  universally  used,  there  would  conceivably 
be  some  justification  for  this  selling  cost;  but  the  article  referred 
to  is  a  typewriter,  which  has  come  to  be  practically  a  staple. 

There  is  another  highly  successful  typewriter  whose  selling 
cost  is  still  four  times  manufacturing  cost.  There  are  several 
other  very  successful  typewriters  which  have  selling  expense 
down  to  three  times  cost  of  manufacture,  which  may  be  regarded 
as  fairly  normal  for  typewriters  or  any  well-known  semi-staple 
mechanical  device  where  repair  and  service  after  purchase 
is  an  additional  factor. 

But,  gazing  generally  over  the  field  of  manufacture,  selling 
cost  in  a  surprising  number  of  cases  is  excessively  high.  Only 
in  the  most  staple  of  staple  lines  does  it  come  down  to  a  more 
sane  proposition.  One  or  one  and  a  half  times  the  cost  of 
manufacture   is   a   general   average   for   selling  staples,   while 

*Printers'  Ink,  August  4,  1910,  p.  3. 


DISPOSAL  OF  ADVERTISING  COSTS  437 

in  the  drug  lines,  and  specialties  in  all  lines,  grocery,  textile, 
hardware,  etc.,  the  selling  cost  rises  to  four,  five,  and  six  times 
the  cost  of  manufacture.  Sometimes,  for  some  articles  (and 
not  all  of  them  like  Col.  Sellers'  Eyewash,  either),  the  cost 
of  manufacture  is  a  mere  nothing,  and  almost  the  only  expense 
is  selling  expense! 

The  estimates  of  selling  expense  just  made  include  office 
and  overhead  expense  and  everything  else  chargeable 
Estimates  ^^  ^^  "selling  end."  To  examine  selling  cost  more 
Expense  ^^  single  detail,  let  us  take  purely  the  cost  of  sales- 
men and  sales  departments,  exclusive  of  whatever 
else  might  be  chargeable  to  selling. 

In  hosiery  and  underwear  lines  this  selling  expense  (frequently 
the  only  kind  there  is)  runs  to  6  and  10  per  cent,  of  net  return. 
In  men's  clothing  it  runs  from  4  to  7  per  cent.  In  office  equip- 
ment lines  it  runs  to  25  and  33  per  cent.,  and  in  drug  and 
hardware  lines  it  runs  up  from  25  to  40  and  60  per  cent,  and 
higher.  In  purely  luxury  lines  selling  cost  has  no  roof  at  all 
—  it  is  as  expansive  as  the  empyrean  blue  —  according  to  the 
article,  competition  and  method  of  distribution.  The  branch 
agency  is  mighty  expensive  machinery  of  sales,  but  it  produces 
volume  and  keeps  sales  contact  with  consumers  keyed  up  (things 
which  are  vital  in  competition).  It  frequently  costs  $500  to 
sell  an  auto,  and  the  average  is  $100  to  sell  a  piano.  In  many 
cases,  especially  in  the  piano  business,  there  is  precious  little 
profit  left  after  this  high  selling  cost  is  expended. 

This  matter  of  increasing  selling  cost  is  becoming  more  and 
more  vital  all  the  time,  because  of  two  things,  the  widening 
of  markets  and  the  growth  of  competition.  The  bigger  a 
manufacturing  concern  becomes,  the  greater  usually  does  the 
selling  cost  become.  This  may  seem  paradoxical,  but  public 
accountants  will  testify  to  its  almost  invariable  truth,  A  selling 
organization  adequate  to  the  territory,  the  policies  and  the 
product  of  a  large  concern  increases  selling  cost  considerably 
over  that  of  a  smaller  manufacturer,  chiefly  because  the  large 
manufacturer  needs  more  executives  and  must  meet  competition 
at  more  points.  He  has  more  baskets  of  eggs  to  be  watched 
than  the  small  manufacturer. 

In  the  last  decade  or  two,  therefore  —  ever  since  the  begin- 
ning of  big  markets  and  big  enterprises  —  selling  cost  has 
been  rising  steadily  and  become  a  problem  with  manufacturers. 
Some  have  agreeably  deluded  themselves  about  the  true  state 


438        ADVERTISING  AS  A  BUSINESS  FORCE 

of  aflfairs  by  figuring  loosely  that  reduction  of  cost  of  'production 
was  "helping"  to  lessen  selling  cost.  But  inquisitive  modern 
cost  accounting  turns  the  light  on  such  delusions  for  those 
manufacturers  (none  too  many)  who  are  modern  enough  to 
have  thoroughgoing  cost  systems. 

The  one  significant  thing  about  selling  costs  is  still  blindly 
overlooked  by  many  manufacturers,  while,  meantime,  those 
keener  ones  who  do  understand  it,  and  have  applied  it  long 
ago,  are  the  big  gainers.  Selling  cost  goes  down  in  proportion 
to  the  reputation  of  the  goods,  and  the  favorable  conviction  in 
the  mind  of  the  buyer.  You  don't  have  to  work  nearly  so  hard 
to  sell  me  Baker's  chocolate  as  you  do  to  sell  me  Jones's  choco- 
late. Neither  do  you  have  to  work  so  hard  to  sell  dealers  and 
jobbers.  In  fact,  in  such  exceptional  cases,  like  Baker's  and 
a  few  others,  you  could  shut  down  on  all  selling  expense  for 
a  time  and  make  a  lot  of  money  nevertheless. 

The  very  best  proof  in  the  land  that  advertising  decreases 

selling  cost  is  contained  in  the  situation  of  Hart,  Schaffner 

Effects  of  ^  Marx,  the  famous   clothing  house,  as  compared 

Advertis-  with  other  clothing  houses.     Hart,  Schaffner  &  Marx 

ing  on     are  authoritatively  reputed  to  do  an  annual  volume 

Selling     ^f  business  of  about  $15,000,000.     .     .     . 
°^  Good  advertising  has  been  their  keynote  all  this 

time;  and  to-day  their  salesmen  (who  are  on  salary,  not  commis- 
sion) talk  little  else  but  advertising  to  dealers.  It  is  related  how 
one  dealer  who  listened  to  a  long  and  interesting  delineation 
of  what  the  house  of  Hart,  Schaffner  &  Marx  had  done,  was 
doing  and  would  do  in  the  way  of  advertising,  suddenly  said, 
"Yes,  that's  fine,  but  what  about  the  clothes  ?" 

The  salesman  dismissed  this  subject  with  few  words.  "Ask 
those  who  know,  or  demand  any  test  you  choose  —  the  clothes 
are  right.  What  concerns  you  most  is  how  those  clothes  are 
advertised^  And  Hart,  Schaffner  &  Marx  are  so  beautifully 
intrenched  in  their  position  that  they  can  demand  that  the 
dealer  who  holds  the  line  must  increase  sales  every  year  or  make 
way  for  some  one  who  will.  In  magazine  advertising  alone 
this  spring  and  last  fall  Hart,  Schaffner  &  Marx  spent  $85,000  — 
about  twice  what  its  nearest  competitor  spent.  This  figure 
is  not  a  guess,  it  is  checked  up  frotn  the  magazines.  One 
hundred  and  twenty-five  thousand  dollars  would  probably 
cover  the  total  advertising  expenditure,  newspaper  adver- 
tising and  all. 


DISPOSAL  OF  ADVERTISING  COSTS  439 

Now  let  us  measure  up  selling  costs.  For  the  sales  depart- 
ment expense  (everything  but  advertising),  I  learn  from  inside 
sources.  Hart,  Schaffner  &  Marx  spend  only  2\  to  3  per  cent. 
See  how  this  measures  up  beside  other  clothing  houses : 

Magazine  Selling 

Advertising  Cost 
1910-11 

Hart,  Schaffner  &  Marx    $85,000  2|-3% 

B.  Kuppenheimer  &  Co 49,000  4% 

Samuel  W.  Peck  &  Co 29,000  6% 

Alfred  Benjamin   24,000  7% 

Here  is  one  of  the  most  powerful  object  lessons  ever  tabulated 

regarding   the   relation   of   advertising   to   sales   policies.     In 

almost  perfect  proportion  to  the  expenditure  for  ad- 

Cost  Com-  vertising,  the  selling  cost  has  decreased  and  volume 

^^rf?n^    of   sales   increased.    Those   clothing    manufacturers 

firms  named  above  are  all  advertisers  —  there  is  an  end- 
less number  of  other  clothing  manufacturers  whose 
names  are  little  known  to  consumers,  and  whose  selling 
cost  ranges  all  the  way  from  6  to  9  per  cent.  They  are 
getting  neither  the  reduced  cost  of  manufacture  which  comes 
with  larger  volume  of  sales  nor  the  decreased  selling  cost  which 
comes  with  trade-marking  and  consumer  advertising. 

As  the  selling  cost  named  above  is  that  of  sales  department 
alone,  it  will  be  well  to  examine  how  much  advertising  adds  to  it. 
An  advertising  appropriation  of  $125,000  is  but  .83  per  cent, 
of  a  volume  of  business  of  fifteen  million.  Even  supposing 
that  the  advertising  is  underestimated  and  the  volume  of 
business  overestimated,  the  difference  could  not  be  larger 
than  1  per  cent.  The  total  Hart,  Schaffner  &  Marx  selling 
cost  would  then  stand  at  3|  to  4  per  cent.  —  which  is  unques- 
tionably tremendously  low.  There  still  remains  a  large  gap 
between  the  low  selling  cost  achieved  by  the  two  clothing 
firms  advertising  most  extensively  and  the  higher  cost 
necessary  now  to  non-advertising  firms. 

A  most  interesting  thing  about  this  relation  of  advertising 
to  selling  cost  is  that  it  is  cumulative  in  its  effect.  The  table 
of  figures  quoted  shows  how  the  selling  costs  of  clothing  firms 
varied  in  proportion  to  the  double  ratio  of  amount  spent  and 
length  of  time  since  first  consumer  advertising  began. 

When  you  get  right  down  to  it,  the  division  of  selling  cost 


440        ADVERTISING  AS  A  BUSINESS  FORCE 

into  a  separate  advertising  classification  is  pretty  difficult. 
The  average  accountant  in  manufacturing  concerns  is  more 
or  less  at  sea,  and  there  has  not  yet  been  worked  out  much 
uniformity  of  cost  accounting  on  this  subject.  Live  sales 
forces  have  men  who  travel  with  the  purely  secondary  object 
of  taking  orders.  They  are  out  on  the  road  to  suggest  a  new 
sign,  a  rearrangement  of  a  dealer's  store,  or  anything  to  clinch 
the  dealer's  good-will  and  advertise  the  house.  Now,  is  this 
selling  or  is  it  advertising? 

Likewise,  when  a  special  catalogue  or  folder,  enclosing  order 
blanks,  etc.,  is  sent  from  the  advertising  department,  and 
orders  come  in  as  a  result,  is  that  advertising  or  selling.'*  How 
can  the  two  possibly  be  separated?  They  cant  —  the  produc- 
tive result  of  the  two  working  together  must  be  measured 
in  contrast  with  a  similar  concern  where  one  works  alone. 
And  that  contrast  is  strikingly  afforded  in  the  clothing  figures 
quoted. 

As  a  matter  of   fact,  the  entire  "selling   expense"  for  any 
specialty  or  novelty  is  advertising  expense.     It  must  be  adver- 
tised in  some  way  before  it  can  be  sold  at  all,  for  it 
Selling     niust  educate   its  prospective  buyers   and  create   a 
YoTa^  demand  which  has  not  before  existed.      Any  trade- 
Novelty     marked  staple  which  sells  on  individual   merit  has 
the  same  road  before  it.     If  it  would  rise  above  the 
dead  level  distinctions  of  quantity  and  common  name,  it  has 
to  turn  its  selling  expense  into  advertising  channels.     It  must 
sell  not  to  buyers  of   a  generic  commodity  but  to  buyers  of 
a  marked  quality.     And  the  selling  expense  of  doing  this  has 
a  "come-back"  action  like  insurance  renewal  commissions  — 
it  compounds  itself  without  effort  as  time  goes  on  —  making 
the  cost  of  selling  per  unit  less  and  less.     The  selling  cost  per 
unit  of  Ivory  soap  must  be  pretty  nearly  infinitesimal  by  this 
time,  else  the  size  of  the  cake  and  the  retail  price  would  have 
been  changed  to  conform  to  the  increased  cost  of  raw  materials, 
labor,  advertising,  salesmen,  etc.  —  which  is  making  it  practi- 
cally impossible  for  any  other  soap  concern  to  give  consumers 
as  much  per  cake  for  their  money  as  Ivory. 

The  serious  problem  now  before  the  large  company  of  manu- 
facturers who  comprehend  the  economies  of  advertising  is  to 
so  study  advertising  methods  as  to  decrease  selling  costs  still 
further,  and  achieve  in  the  shortest  time  and  for  the  smallest 
sum,  the  largest  volume  of  business.     Without  the  slightest 


DISPOSAL  OF  ADVERTISING  COSTS  441 

doubt,  there  is  a  greater  waste  of  wealth  and  "natural  resources" 
through  unduly  high  selling  costs  than  all  the  Pinchots  and 
Garfields  and  Brandeis  ever  painted  on  their  imaginations. 
From  a  careful  average  of  selling  costs  in  many  lines  of  manu- 
facture, I  think  it  would  be  conservative  to  say  that  selling 
cost  averages  in  general  twice  the  cost  of  manufacture,  staples 
included ;  which  means  that  America  spends  annually  at  present 
forty  billion  dollars  on  selling,  based  on  census  estimates  of 
$21,000,000,000  now  expended  for  wages,  salaries,  raw  mate- 
rials, etc. 

Clean-cut,  well-considered,  and  closely-adapted  advertising 
is  bound  in  the  future  to  cut  this  enormous  selling  expense 
very  materially,  and  put  manufacturing  on  a  more  stable 
and  effective  plane. 

From  these  discussions  of  the  costs  and  profits  in  the  distri- 
bution of  merchandise  there  stands  out  clearly  one  point. 
It  is  that  the  definition  of  the  word  "pays"  in  the  question 
"Who  pays  for  advertising.'^"  depends  very  largely  on  the 
effects  of  the  advertising.  A  statement  made  concerning 
advertising  outlay  which  produces  absolutely  no  results  would 
not  hold  at  all  for  advertising  expense  which  brought  in  mod- 
erate returns,  nor  would  a  statement  made  for  advertising 
outlay  which  brought  in  moderate  returns  hold  for  a  similar 
outlay  which  resulted  in  the  creation  of  a  wide,  permanent 
market  for  a  new  product. 

WHAT   IS   ADVERTISING? 

The  term  "advertising"  in  the  sense  in  which  it  is  used  in 
the  larger  question,  "Who  pays  for  advertising.''"  requires 
analysis  just  as  does  the  term  "pays."  Here,  again,  we  find 
that  our  definition  depends  almost  entirely  on  the  character 
of  that  which  passes  under  the  name.  If  the  advertising  takes 
the  form  of  publicity  which  yields  neither  actual  or  future 
increase  in  market,  then  we  are  talking  about  one  thing,  but 
if  it  takes  the  form  of  an  intelligent  outlay  for  securing  definite, 


442        ADVERTISING  AS  A  BUSINESS  FORCE 

valuable  results,  then  we  are  talking  about  something  entirely- 
different.  In  either  case,  the  question  as  to  the  source  of  the 
payment  must  depend  on  the  desirability  of  the  results  aimed 
at  and  the  effectiveness  with  which  the  advertising  secures  them. 

It  is  a  recognition  of  the  distinction  between  the  reasoning 

which  can  be  applied  to  effective  advertising  compared  with 

that  which  will  hold  in  the  case  of  unsuccessful  adver- 

7  Adver-  rising  that  lies  under  much  of  the  discussion  of  the 

Using  an   question:     "When  is  advertising  an  investment  and 

mint?  when  is  it  an  expense?"  This  question,  of  course, 
is  merely  a  corollary  of  the  major  problem,  "Who 
pays  for  advertising?" 

It  is  this  question  of  how  advertising  ought  to  be  treated 
on  the  books  of  a  company  that  lies  back  of  any  attempt  to 
reach  conclusions  as  to  what  constitutes  good- will.  If  good- 
will depends  largely  on  the  earning  capacity  of  a  company,  and 
if  the  earning  capacity  depends  upon  the  attitude  of  the  market 
toward  the  concern's  product,  and  if  this  attitude,  in  turn,  is 
largely  influenced  by  the  character  of  advertising  appeal,  it  at 
once  becomes  clear  that  the  question  of  "  How  much  to  spend  for 
advertising?"  is  very  closely  associated  with  the  question,  "How 
much  to  spend  for  securing  good-will?" 

HOW   MUCH    TO    SPEND    FOR   ADVERTISING 

The  law  of  diminishing  returns  works  as  plainly  through  the 
problems  of  the  manufacturer  as  in  any  field  of  production. 
And  in  no  place  is  the  operation  of  this  law  more  clearly  defined 
than  it  is  in  the  matter  of  advertising  outlay.  Nearly  every 
manufacturer  recognizes  that  there  is  a  point  up  to  which 
increased  advertising  expense  will  yield,  and  beyond  which  it 
will  not  yield,  adequate  returns.  This  may  not  be  merely  the 
point  at  which  the  immediately  resulting  sales  will  yield  a  profit 
greater  than  the  advertising  outlay.  It  may  be  that  point 
far  beyond  this,  where  all  of  the  elements  which  go  to  make 


DISPOSAL  OF  ADVERTISING  COSTS  443 

good-will  cease  adding  value.  This  point  may  be  far  beyond 
the  present  limits  of  the  business  and  it  may  be  even  a  movable 
point.  That  depends  on  individual  conditions.  But  every 
manufacturer  realizes  that  since  all  of  his  return  from  adver- 
tising must  come  either  out  of  increased  volume  or  increased 
profitability  of  sales  there  is  a  point  in  his  advertising  outlay 
beyond  which  he  cannot  go  with  any  reasonable  expectation 
of  success. 

This  feature  of  the  interrelation  between  advertising  outlay 

jj^^i^      and  the  possibilities  of  return  is  brought  out  in  the 

Much     following    discussion   of  the  question,   "How  much 

Be  Svent  ^^^^  we  spend  for  advertising.'^"     This  question  is 

for  Good-  discussed  in  the   light  of  the  problems  it  presents 

^'^  '      to  a  new  concern,  which  depends  in   a    large   part 

for  its  answer  on  the  ability   of  the   advertising   to   secure 

"good-will." 

In  this  article  It  is  taken  for  granted  that  the  immediate 
effect  on  sales  cannot  yield  the  amount  of  the  outlay  and  that, 
consequently,  the  return  from  the  advertising  must  come  in 
the  form  of  "good-will,"  or,  in  other  words,  the  possibilities 
of  future  earnings  for  the  concern. 

*An  advertising  man  who  had  been  reared  in  the  close- 
paring,  department  store  school  where  the  advertising  expen- 
diture was  fixed  at  3  per  cent,  of  the  total  sales,  was  called 
into  a  newly  established  manufacturing  business.  Upon  being 
given  access  to  the  books,  he  was  appalled  to  find  that,  whereas, 
the  total  sales  for  the  previous  year  —  the  fourth  of  the  com- 
pany's existence  —  were  not  quite  a  quarter  of  a  million 
dollars,  the  advertising  appropriation  for  the  current  year  was 
$50,000  —  just  21  per  cent,  of  the  sales.  His  first  thought 
was  that  he  had  been  called  to  assist  at  an  autopsy,  for  these 
figures  would  spell  ruin  with  a  capital  "R"  to  the  depart- 
ment store,  and  he  made  remarks  to  that  effect  at  his  first 
conference  with  the  president. 

The  latter  reassured  him  with  a  smile.     "We  are  investing 

^Printers  Ink,  July  18,  1912,  p.  3, 


444        ADVERTISING  AS  A  BUSINESS  FORCE 

our  money,"  he  said.  "Remember,  this  is  a  comparatively- 
new  concern  and  among  other  things  it  must  have  to  succeed 
is  good- will.  It  must  buy  that  just  the  same  as  if  it  were 
buying  bonds  —  to  return  not  to-day  or  to-morrow,  but  years 
hence.  Good- will  to  us  is  even  more  important  than  machinery 
and  raw  material,  for  it  would  profit  us  nothing  to  make  goods 


1 


^jJX  ^ 


AbnluTp-Complrtoi 


BcUUvr — Ctuncter  of  aftoT 


which  we  could  not  sell.  So  just  as  we  invest  a  part  of  our 
capital  in  machinery,  tools  and  material  with  which  to  make 
a  product,  we  put  part  of  it  into  good-wiU  to  help  sell  the 
product. 

"You  would  not  exclaim  if  we  put  the  fifty  thousand  into 
salesmen.  Yet  they  might  pay  a  very  small  return  in  good- 
will, comparatively  speaking,  because  they  might  force  the  sale 
of  the  goods  upon  many  an  unwilling  purchaser,  and  we  might 


DISPOSAL  OF  ADVERTISING  COSTS  445 

have  to  spend  more  in  proportion  to  the  sales  as  time  went  on. 
In  this  case,  however,  you  will  see  the  ratio  gradually  decline. 
With  reasonable  efficiency  in  our  general  management ,  in 
five  years  I  expect  to  see  the  advertising  appropriation  re- 
duced to  10  per  cent,  or  possibly  a  little  lower.  In  this  line 
of  business  it  can  hardly  be  expected  to  fall  be  low  8  or  10  per 
cent." 

The  view  expressed  above  is  the  new  view  —  a  way  of  looking 
at  things  which  would  have  caused  apoplexy  some  twenty  years 
ago.     Even  to-day  it  is  heresy  in  some  places. 

A  writer  in  one  of  the  current  magazines  —  supposed  to 
be  a  high  authority  on  financial  subjects  —  strongly  advises 
intending  investors  against  buying  the  securities  of  any  indus- 
trial "greatly  dependent  upon  patents  in  its  manufacturing 
end,  or  advertising  in  its  selling  end."  The  assumption  is, 
of  course,  that  just  as  patents  may  be  rendered  obsolete  by 
new  inventions  and  will  go  out  of  existence  anyway  in  seven- 
teen years  or  less,  the  effect  of  advertising  may  be  overcome  by 
rival  advertising,  and  the  advertising  of  yesterday  is  as  dead 
as  an  expired  patent.  That  it  is  very  much  alive,  a  glance 
at  the  good-will  columns  in  the  footnote  at  the  bottom  of 
this  page  will  show. 

A  goodly  portion  of  those  vast  amounts*  set  down 

Some      there  under  the  head  of  good-will  are  the  results  of  the 

of  the      advertising   which  has    been    done  —  the   mill   still 

Placed  on  grinding  with  the  water  that  is  past.     Thirteen  mil- 

Good-will  lion  dollars  of  Woolworth's   money  invested  in  the 

highest  office  building  in  the  world  is  a  stupendous 

advertisement  of  his  good-will  account.     The  B.  F.  Goodrich 

Company,  recently  consolidated  with   the  Diamond   Rubber 


'^THE    RELATION    OF    THE    CAPITAL,    ASSETS    AND    GOOD-WILL    OF    SOME   LEADING 
INDUSTRIAL  CORPORATIONS  AS  REPORTED  BY  BOSTON  NEWS  BUREAU 

Name  Capital 

Goodrich $90,000,000 

Woolworth 65,000,000 

Sears-Roebuck 48,500,000 

Studebaker 43,500,000 

May  Dept 20,000,000 

Underwood 13,500,000 

Loose- Wiles 13,000,000 

*Estimated. 


Assets 

Good-will 

Assets 

Per  Cent. 

$100,877,604 

*$57,000,000 

56.5 

65,157,155 

50,075,000 

76.8 

60,768,949 

30,000,000 

49.3 

56,476,143 

19,807,277 

35.0 

21,377,229 

14,343,957 

67.0 

15,476,785 

7,995,720 

52.2 

15,247,152 

7,970,543 

51.6 

446        ADVERTISING  AS  A  BUSINESS  FORCE 

Company,  capitalizes  a  cool  $57,000,000  of  good-will !  What  does 
that  represent?  Patents  are  of  mighty  little  importance  in  the 
rubber  business,  secret  processes  of  manufacture  are  practically 
common  property,  location  cuts  very  little  figure,  proprietorship 
has  changed  a  dozen  times,  the  Goodrich  who  founded  the  busi- 
ness having  been  dead  for  many  years,  and  no  one  bearing  the 
name  figures  in  the  management.  That  "  good-will "  represents 
advertising,  practically  entirely.  It  is  the  result  —  or  rather 
one  of  the  results  —  from  the  constant  repetition  of  "Best 
in  the  Long  Run."  It  is  summed  up  in  the  attitude  of 
the  young  lady  whom  the  writer  asked  to  name  the  make 
of  tires  her  father  used  on  his  car.  She  didn't  know,  it 
happened,  but  she  said  "Goodrich,  I  suppose,  the  same  as 
they  all  do."  That's  good-will,  and  that  is  what  it  pays  to 
spend  a  mighty  substantial  proportion  of  the  first  few  years' 
sales  to  get. 

With  the  object  of  ascertaining  whether  this  new  attitude 

toward  good-will  (which  includes,  of    course,  the  recognition 

of  advertising  as  an  investment)  had  been  assumed 

TF^a<  \yy  any  fyf  ^j^g  morc  conservative  financial  institutions, 
Means^at  P^inte's'  Ink  sent  a  letter  to  250  banks,  members  of 

the  Bank  the  American  Bankers'  Association,  asking  whether 
there  is  in  financial  circles,  "a  growing  disposition  to 
regard  with  favor  an  aggressive  advertising  policy  when  linked 
up  with  a  successfully  conducted  business,"  The  case  of  the 
Royal  Baking  Powder  Company  was  cited,  which  began  with 
a  small  capital  and  "invested"  the  profits  in  advertising  for 
a  number  of  years.  Eventually  this  business,  which  was  almost 
wholly  a  good-will  proposition,  was  capitalized  for  $20,000,000, 
and  the  common  stock  has  paid  for  some  years  12-per-cent, 
dividends.  The  list  of  bankers  addressed  were  asked  if  they 
would  consider  that  sound  financing,  and  were  requested 
to  state  how  a  man  could  determine  what  proportion  of  money 
spent  for  advertising  could  be  considered  a  legitimate  invest- 
ment. 

Of  those  bankers  who  answered,  33  per  cent,  state  that 
money  spent  for  advertising  should  be  charged  to  "expense" 
in  toto,  and,  by  inference  if  not  by  direct  statement,  that  there 
is  no  tendency  to  regard  an  advertising  policy  as  anything 
but  running  expense.  The  resulting  good-will,  they  affirm,  is 
not  to  be  considered  in  conservative  financing,  and  has  on 
place  on  a  statement  of  assets. 


DISPOSAL  OF  ADVERTISING  COSTS  447 

Twenty-eight  per  cent,  of  the  bankers  who  answered  the 
letter  say  that  good-will  secured  through  an  aggressive  adver- 
tising policy  should  be  given  "due  consideration"  when  it  came 
to  lending  money  or  financing  an  enterprise.  None  of  these 
bankers  would  go  so  far  as  to  say  that  good-will  has  any  place 
in  a  financial  statement,  or  that  it  can  be  charged  to  anything 
except  expense,  but  they  all  asserted  what  the  33  per  cent, 
denied  —  namely,  that  the  good-will  of  a  concern  has  to  be 
considered  very  frequently. 

Fourteen  per  cent,  of  the  whole  number  came  out  flat-footedly 
with  the  assertion  that  there  undoubtedly  is  a  tendency  in 
conservative  financial  circles  to  regard  advertising  as  an  invest- 
ment. With  one  exception  they  agree  that  it  would  be  poor 
bookkeeping  to  list  advertising  as  an  "investment,"  but  they 
admit  that  it  should  be  given  full  consideration  in  extending 
credit.  The  one  exception  states  that  a  certain  portion  of  the 
advertising  expenditure  should  be  shown  on  the  books  as 
investment,  the  portion  to  be  determined  by  a  comparison  of 
the  results  which  had  been  obtained  with  the  reasonable 
expectation  of  results  to  come  in  the  future. 

The  other  25  per  cent,  of  replies  were  absolutely  non- 
committal, some  stating  that  they  did  not  care  to  discuss 
the  question,  and  others  taking  refuge  in  generalities  such  as 
"advertising  is  a  necessity  to  most  concerns,"  etc. 

That  showing  is  to  be  considered  nothing  short  of  remarkable, 
when  it  is  remembered  that  ten  years  ago  the  average  banker 
would  have  scoffed  at  the  idea  of  advertising  at  all. 
Good-will  jjg  didn't  believe  in  it  so  far  as  his  own  business  was 
of  Credit  concerned,  and  he  was  rather  inclined  to  look  upon 
it  with  suspicion  when  it  was  indulged  in  by  other 
people.  When  42  per  cent,  of  a  list  of  bankers  can  be  per- 
suaded to  say  that  good-will  secured  by  advertising  should 
be  given  at  least  "due  consideration"  when  determining  a 
line  of  credit,  it  shows  that  the  status  of  advertising  in  the 
financial  world  is  rapidly  changing.  And  the  wording  of  the 
replies  shows  pretty  conclusively  that  the  bankers  regard 
advertising  as  the  chief  promoter  of  good- will.  Those  who 
do  not  side-step  the  question  entirely  meet  the  issue  squarely 
upon  that  basis.  It  is  not  the  money  spent  for  patents  or  for 
trade-mark  rights  that  they  are  talking  about,  but  the  money 
spent  for  advertising  the  goods. 

Thus  the  man  who  is  facing  the  question,  "How  much  shall 


448        ADVERTISING  AS  A  BUSINESS  FORCE 

I  spend  for  advertising?"  has  better  and  higher  authority 
than  ever  before  for  regarding  the  appropriation  as  an  invest- 
ment, paying  dividends  in  good-will.  It  is  true  that  it  figures 
in  the  books  as  "advertising  expense,"  but  it  goes  to  make  up 
"demonstrated  earning  power"  whenever  it  is  necessary  to 
re-finance  or  extend  the  credit  of  the  business.  It  is  reported 
on  the  best  authority  that  the  National  Biscuit  Company  had 
been  advertising  Uneeda  Biscuit  for  three  years  before  the 
sales  of  that  commodity  paid  a  profit,  yet  no  one  in  his  senses 
would  maintain  that  it  was  "merely  an  expense."  Of  course 
the  company  was  selling  other  crackers  at  a  profit  big  enough 
to  more  than  offset  the  deficit,  but  even  if  that  were  not  the 
case  the  advertising  of  Uneeda  would  have  been  an  investment 
just  the  same,  and  future  events  have  shown  that  the  company 
could  have  afforded  to  pay  for  that  advertising  out  of  the 
capital  of  the  concern  if  no  other  source  w^ere  available.  Since 
1905  the  dividends  paid  on  the  common  stock  have  risen  form 
4  to  9  per  cent,  while  the  physical  assets  have  increased 
only  from  sixty-two  to  sixty-six  million  dollars.  While  there 
are  only  four  million  dollars  more  physical  assets  than  there 
were  in  1905,  nobody  would  be  likely  to  accuse  the  National 
Biscuit  Company  of  frenzied  finance  if  it  should  increase  its 
capitalization  ten  to  fifteen  millions.  Yet  the  greater  part 
of  the  increased  capital  would  be  represented  by  nothing 
tangible.  It  is  simply  the  demonstrated  earning  power,  much 
of  which  is  the  result  of  the  advertising  expense  of  last  year 
and  the  year  before. 

It  is  evident,  then,  that  it  is  not  wise  to  limit  the  advertising 
appropriation  to  an  amount  which  seems  likely  to  "come 
back"  the  first  year.  In  other  words  the  money  spent  for 
advertising  cannot  be  expected  to  return  at  once  with  a  profit 
in  its  hand.  But  it  is  not  wise  to  plunge  so  heavily  as  to 
endanger  the  credit  of  the  business,  for  be  it  understood,  good- 
will is  a  fine  thing  is  connection  with  a  going  business,  while 
the  good- will  of  a  bankrupt  concern  isn't  worth  a  cent. 

In  a  sense  good-will  is  a  sort  of  business  momentum.  As 
long  as  the  concern  keeps  going,  last  year's  advertising  helps 
keep  up  the  speed  just  as  the  momentum  of  the  last 
Momentum  ^^^^  ^f  a  locomotive's  drive  wheels  helps  send  them 
around  the  next  time:  but  after  the  concern  has  once 
stopped,  the  good- will  it  used  to  have  will  not  help  start  it 
again  any  more  than  the  locomotive's  momentum  on  its  last 


DISPOSAL  OF  ADVERTISING  COSTS  449 

run  will  help  overcome  its  inertia  as  it  stands  in  the  round- 
house. 

That  fact,  by  the  way,  makes  the  new  attitude  of  the  bankers 
all  the  more  striking,  since  the  banker  always  looks  at  a  financial 
statement  from  the  standpoint  of  what  the  assets  would  be 
worth  in  case  of  failure  —  not  considering  at  all  what  they  are 
worth  under  an  aggressive  sales  policy. 

No  less  an  authority  than  Elijah  W.  Sells,  of  Haskins  &  Sells, 
Certified  Public  Accountants  of  New  York,  says  that  "such 
advertising  which  has  a  direct  effect  in  creating  or  measurably 
increasing  the  good-ioill  of  a  business  may  be  considered  as  an 
investment,  while  that  which  is  done  to  maintain  a  normal 
distribution  or  call  attention  to  special  temporary  prices  should 
be  considered  an  expense."  In  other  words,  the  advertising 
which  goes  directly  to  the  promotion  of  the  good-will  of  a  new 
concern  can  properly  be  capitalized,  and  paid  for  out  of  money 
received  for  stock,  while  that  advertising  which  is  done  simply  to 
maintain  something  already  secured  should  come  out  of  profits. 

Hence  it  is  evident  that  the  answer  to  the  question  "How 
much  shall  we  spend  for  advertising?"  is  "Enough  to  secure 
a  demonstrated  earning  power  (good- will),  which  will  produce 
profits  sufficient  to  pay  for  the  advertising  necessary  to  maintain 
distribution  of  the  goods."  That,  of  course,  is  the  minimum 
amount. 

Conditions  in  different  businesses  vary  so  greatly  that  no 
exact  percentages  can  be  given.  But  the  analysis  of  good- 
will on  page  445  which  was  prepared  for  Printers'  Ink  by  Paul 
T.  Cherington,  instructor  in  the  Graduate  School  of  Business 
Administration,  Harvard  University,  gives  some  clues  as  to 
the  conditions  which  determine  whether  the  amount  spent 
for  advertising  at  the  start  shall  be  a  greater  or  a  less  part 
of  the  capital. 

Since  we  are  discussing  an  entirely  new  business,  none  of 
the  "  Intangible  Factors "  will  affect  the  advertising  invest- 
ments, except  the  product  and  the  trade-mark.  The  lower 
the  quality  of  the  product,  the  harder  to  create  good-will,  and 
the  more  money  must  be  spent.  The  smaller  the  profit  it  pays 
those  handling  it,  the  easier  it  must  be  made  for  them  to  sell, 
which  of  course  means  more  advertising.  The  quality  and 
adaptability  of  the  trade-mark  will  affect  the  advertising  in 
the  same  manner,  though  not  to  the  same  extent.  Of  course, 
being  a  new  trade-mark,  its  age  and  reputation  are  negligible. 


450       ADVERTISING  AS  A  BUSINESS  FORCE 

When  we  come  to  the  "tangible  factors,"  under  "increased 

sales"   we  find  the   item   "possible   market."     Being  a   new 

concern    the   "actual    market"    may    be    assumed 

Good-will   to  be  non-existent.     The  size  of  the  possible  market, 

inRela-    ^f  course,  affects  the  size  of  the  appropriation,  since 

Earning    ^he  wider  the  field  the  more  it  costs  to  cover  it. 

Capacity  But  there  is  another  important  consideration  right 

here,  and  that  is  the  number  of  possible  individual 

buyers  in  the  market. 

The  business  with  500  customers  is  less  valuable 
than  the  business  with  5,000  customers,  if  the  gross  sales 
of  both  are  the  same.  Thus  the  good-will  of  a  chewing-gum 
concern  would  be  worth  more  than  that  of  a  piano  house  doing 
the  same  amount  of  annual  business.  The  reason  for  this  is 
that  it  is  easier  to  lose  a  substantial  percentage  of  500  customers 
than  it  is  to  do  the  same  thing  with  5,000.  So  to  make  the  good- 
will of  the  piano  house  equal  in  value  with  that  of  the  chewing- 
gum  concern  will  require  more  money  and  more  effort.  Hence, 
the  new  piano  concern  can  afford  to  spend  more  money  than 
the  new  chewing-gum  company  —  more,  of  course,  in  proportion 
to  the  capital,  not  necessarily  a  larger  integral  amount. 

With  regard  to  the  share  of  the  possible  market,  the  following 

is  quoted  from  L.  R.  Dicksee,  professor  of  Accounting  at  the 

University  of  Birmingham,  England,   probably   the 

The  Good-  leading  authority  on  the  subject  of  good-will:     "In- 

will  of  a  j'jr  1  •  1 

Monopoly  come  derived  from  a  monopoly  or  quasi-monopoly 

will  command  a  higher  rate  of  good-will  than  one 
derived  from  an  industry  in  which  competition  is  keen."  The 
application,  of  course,  is  evident.  The  monopoly  of  quasi- 
monopoly  need  not  spend  so  much  money  in  advertising 
as  the  business  in  a  competitive  line. 

The  above,  however,  does  not  apply  with  full  force  to 
monopolies  granted  by  patent  rights,  since  at  any  time  it  is 
possible  that  subsequent  inventions  may  depreciate  the  Tahie 
of  the  patents. 

The  heading  "capacity  of  product"  refers  to  the  frequency 
of  purchase.  If  the  product  is  one  which  is  totally  consumed  — 
like  soap,  shoes,  food-products,  etc.,  the  customer  will  be  again 
in  the  market  for  similar  goods  before  long.  If,  however,  it 
is  a  product  which  is  only  partially  consumed  —  like  articles 
of  hardware,  furniture,  utensils,  etc.,  the  same  customer  may 
not  buy  more  than  twice  or  three  times  in  a  lifetime. 


DISPOSAL  OF  ADVERTISING  COSTS  451 

In  the  former  case  the  good-will  is  worth  more  than  in  the 
latter,  and  it  is  easier  to  get  because  there  is  often  an  argument 
in  the  quality  of  the  goods  themselves  which  makes  future 
sales.  In  considering  the  amount  to  be  spent  for  advertising, 
this  factor  is  relatively  unimportant  when  compared  with  the 
size  of  the  market,  and  the  quantity  of  competition.  As  a 
general  rule,  however,  distribution  is  more  important  than 
good-will  (at  the  start)  for  goods  which  are  bought  only  once 
or  twice  in  a  lifetime.  For  if  your  competitor  gets  the  one  sale, 
you  cannot  hope  to  reach  that  particular  person  for  years  if 
you  can  reach  her  at  all,  whereas  if  the  goods  are  totally  con- 
sumed with  reasonable  quickness  a  second  sale  will  be  ripe  for 
picking  shortly  which  your  advertising  may  land.  The  goods 
which  are  totally  consumed  need  more  good-will  advertising 
at  the  start,  to  secure  the  second  sale  if  the  first  goes  elsewhere. 

Under  the  head  of  "Increased  profits,"  the  subject  of  costs 
has  a  bearing  on  good- will  only  when  the  business  is  to  be  sold. 
It  is  quite  true  that  selling  costs  have  an  influence  upon  prices 
which  in  turn  affect  the  consumer,  but  they  have  little  bearing 
upon  the  subject  of  how  much  to  spend  for  advertising.  In 
fact  the  amount  spent  for  advertising  (with  due  regard,  of 
course,  for  the  way  in  which  it  is  spent)  will  have  more  effect 
upon  selling  costs  than  the  other  way  around.  And,  as  a  matter 
of  fact,  the  selling  cost  for  any  article  cannot  be  determined 
in  advance  anyway. 

The  better  the  maintenance  of  prices   ("standardization" 

in  the  table)  the  greater  the   good-will  —  because  everybody 

Good-will   '^^  treated   alike,   and  nobody  has  a  chance  to  feel 

and  Price  disgruntled.     Hence,  other  things  being  equal,  the 

Mainte-    concern  which  is  selling  at  "any  old  price"  will  be 

nance  obliged  to  spend  more  money  in  advertising  to  get 
the  same  result. 

There  are  two  other  considerations  which  enter  into  the 
good- will  analysis,  and  which  have  a  particular  bearing  upon 
the  advertising  investment.  The  first  is  the  kind  of  business 
engaged  in.  Does  it  supply  a  need  which  is  readily  recognized 
by  the  public,  or  must  consumers  be  educated  to  the  use  of  the 
product?  It  is  evident  that  a  concern  in  the  latter  class  will 
have  to  spend  much  more  for  its  good-will  than  one  in  the 
former,  other  things  being  equal  of  course.  Just  as  an  example 
of  what  is  meant,  the  man  who  put  the  first  rubber  hot  w^ater 
bottle  on  the  market  could  have  piled  up  good-will  at  a  com- 


452        ADVERTISING  AS  A  BUSINESS  FORCE 

paratively  small  outlay,  while  the  first  adding  machine  was 
a  good  many  years  getting  any  good-will  to  speak  of.  Good- 
will comes  easier  in  the  line  of  business  which  is  established  and 
recognized  than  in  the  new  field. 

And  second  is  the  amount  of  dependence  the  public  places 
upon  the  services  of  the  proprietor  or  founder  of  the  business. 
This  factor  is  rarely,  if  ever,  met  with  in  an  ordinary  mer- 
chandizing business,  but  it  is  frequent  in  publishing  businesses 
where  the  editor  or  star  writer  keeps  a  large  portion  of  the 
subscription  list  together. 

In  such  a  case,  unless  the  business  were  to  be  allowed  to 
slump  with  the  death  or  retirement  of  the  individual,  it  would 
be  necessary  to  spend  a  comparatively  large  sum  in  advertising 
for  good-will.  When  the  good-will  of  a  business  is  appraised 
for  purposes  of  sale,  it  is  customary  to  deduct  a  sum  which 
represents  the  estimated  cost  of  replacing  the  services  of  the 
proprietor.  Of  course  in  case  of  death  or  retirement  this 
amount  would  automatically  deduct  itself  from  the  good-will, 
speaking  in  terms  of  dollars  and  cents. 

In  brief,  the  money  that  is  spent  for  advertising  at  the  start 
of  a  new  business  should  be  put  in  as  an  investment  by  the 
persons  interested  in  the  business,  and  should  not  be  taken 
out  of  profits.  Its  exact  amount  depends  upon  conditions 
in  the  individual  business  which  must  be  carefully  studied, 
not  only  as  they  affect  sales  conditions  but  in  their  relationship 
to  good- will. 


With  this  discussion  in  mind  of  the  relation  between  adver- 
tising outlay  and  its  possible  value  in  the  creation  of  good-will, 
it  is  interesting  to  see  the  great  variety  of  opinion  expressed 
by  accountants  as  to  the  soundest  methods  of  taking  care  of 
advertising  expenditures  on  the  books  of  a  "going"  concern. 

At  one  extreme  we  have  concerns  which  contend  that  since 
advertising  results  cannot  be  separately  shown  on  the  books 
the  only  safe  treatment  Is  to  handle  all  advertising  outlay  as 
if  it  were  a  dead  loss. 

Again,  we  find  those  who  contend  that  an  advertised  product 
is  already  partly  sold,  and,  that  therefore  advertising  outlay 
should  be  treated  as  selling  expense. 


DISPOSAL  OF  ADVERTISING  COSTS  453 

And  yet  again  we  find  those  who  believe  that  the  effects 
of  advertising  are  mainly  on  the  value  of  the  product  in  trade, 
and  that  therefore  these  expenses  belong  among  production 
costs. 

And  still  others  believe  in  treating  these  outlays  as  of  the 
nature  of  an  investment. 

The  following  discussions  show  some  of  the  types  of  opinion 
in  this  matter: 

*How  do  leading  concerns  actually  enter  advertising  expen- 

„  ditures  on  their  books;  as  expense  or  investment.? 

Some         ^  correspondent  of  Printers^  Ink  writes  that  an 

Account-  answer  to  this  question  would  help  him  more  than 

ants  Treat  many  reams  of  theory.     "  What  is  done  when  the 

Advertts-  expenditures  get  into  the  hands  of  the  bookkeeper.? 

mg    u  ay  ^j^g^^  ledger  does  he  open.?     I  am  a  manufacturer 

and  specific  information  will  help  me  in  appraising  the  earnings 

of  my  advertising  expenditure." 

Printers'  Ink  requested  the  views  of  some  of  the  well-known 
advertisers.  Following  is  the  reply  of  Lewis  E.  Kingman, 
advertising  manager  of  the  Florence  Manufacturing  Company, 
making  the  Prophylactic  tooth  brush : 

*'  Our  advertising  expenditures  are  charged  as  an  expense. 
We  do  not  see  how  this  could  be  otherwise  handled. 

"  As  a  matter  of  fact,  we  have  a  realizable  asset  in  our  trade- 
mark names,  brought  about  by  long  continued  publicity, 
but  it  does  not  seem  to  us  good  business  to  carry  this  on  our 
books  as  an  actual  dollars-and-cents  asset." 

William  H.  Ingersoll,  advertising  manager  of  Robert  H. 
Ingersoll  &  Bro.  ("Ingersoll  Dollar  Watch"  and  "Ingersoll 
Trenton  Watch"),  New  York,  agrees  with  Mr.  Kingman  in 
believing  that  advertising  should  not  be  represented  entirely 
as  an  operating  expense.     Mr.  Ingersoll  says : 

"  In  response  to  your  favor  of  the  18th,  inquiring  as  to  how  we 
charge  our  advertising,  we  would  say  that  it  is  our  custom  to 
charge  it  as  an  expense.  We  do  not  do  this  because  we  believe 
that  advertising  ought  to  be  charged  entirely  to  expense  for  we 
are  well  aware  that  our  factories  and  offices  could  be  destroyed 
completely  by  fire  and  yet  the  biggest  asset  of  our  business 

*Pnnters  Ink,  November  30,  1911,  p,  3. 


454        ADVERTISING  AS  A  BUSINESS  FORCE 

would  remain,  namely,  the  good-will,  and  that  this  is  largely 
due  to  the  advertising  which  we  have  done  and  charged  as  an 
expense. 

"  Our  method  is  due  no  doubt  to  the  custom  of  some  time  ago 
and  probably  the  prevailing  custom  now  to  consider  advertising 
only  an  expense.  We  know  of  no  definite  way  of  determining 
how  much  of  it  should  be  charged  to  expense  and  how  much 
as  an  asset,  and  we  are  aware  of  no  house  having  solved  this 
problem  satisfactorily,  but  it  is  something  that  will  no  doubt 
receive  the  attention  of  the  efficiency  men  and  the  enlightened 
accountants  in  the  early  future." 

E.  T.  Welch,  of  the  Welch  Grape  Juice  Company,  writes 
as  follows: 

"  To  a  somewhat  similar  question  that  was  put  to  us  a  short 
time  ago,  we  replied  that  we  considered  advertising  partly  an 
expense,  partly  an  investment.  So  far  as  the  bookkeeping  is 
concerned,  we  do  not  see  how  any  concern  can  do  otherwise 
than  charge  advertising  up  to  expense  for  each  year.  We 
suppose  some  concerns  carry  an  amount  on  their  books  for 
good-will,  but  it  has  been  some  years  since  we  took  good-will 
into  consideration  in  our  yearly  statements." 

H.  K.  McCann,  advertising  manager  of  the  Standard  Oil 
Company,  is  of  the  opinion  that  practically  all  advertising, 
"probably  99  per  cent  of  it,"  he  says,  should  be  charged  as  an 
operating  expense.     He  goes  on  to  say : 

"  Certainly  all  continuous  advertising  campaigns  that  run  on 
from  year  to  year  must  be  considered  as  such,  and  I  can 
conceive  of  but  very  few  instances  where  it  would  appear 
to  me  to  be  legitimate  to  charge  advertising  into  capital 
account. 

"  I  realize  that  there  are  two  sides  to  this  question  and  that 
exponents  of  the  other  side  can  make  out  quite  a  strong  argu- 
ment in  favor  of  capitalizing  advertising  expense.  In  my 
opinion,  however,  this  is  a  dangerous  thing  to  do." 

G.  H.  Page,  advertising  manager  of  The  W.  N.  Lowney 
Company,  of  Boston,  contends  that  there  should  be  some 
systematic  attempt  to  educate  the  various  factors  in  the  distri- 
bution system,  and  particularly  the  retailers,  as  to  the  ways 
in  which  advertising  outlay  is  paid  for  by  a  reduction  in  other 
expense  in  distribution : 


DISPOSAL  OF  ADVERTISING  COSTS  455 

*That  we  should  be  willing  to  write  on  so  personal  a  subject 
may  surprise  some  advertisers  who  play  the  game  as  secretly 
as  possible.  We  believe  that  it  will  only  do  us  good  if  our  com- 
petitors begin  to  advertise  on  account  of  our  experience.  Any 
advertising  will  be  welcomed  that  increases  the  consumption  of 
chocolate  products  and  with  our  quality  and  price  we  shall 
more  than  get  out  share.  Mr.  Lowney  always  says,  as  any 
broad  gauge  man  who  really  believes  in  advertising  would  say, 
"the  more  the  merrier." 

We  live  under  a  competitive  system.     If  we  lived  under 

a  socialistic  or  co-operative  system  there  is  no  doubt  that  the 

Wlio  Pays  hundreds   of   millions    spent   in    advertising    yearly 

for  the  might  be  saved  to  the  consumer,  but  if  so  it  would 
Advertis-   be  at  a  heavy  cost  to  civilization  which  I  can  only 

"«</■  hint  at  here.  The  cessation  of  advertising  under  a 
co-operative  system  would  deprive  us  by  bankruptcy  of  most 
magazines  and  newspapers  and  it  would  lower  the  standard  of 
living  and  the  volume  of  business  because  consumers  would 
not  know  what  there  is  in  life  to  enjoy. 

But  we  must  adjust  ourselves,  for  the  present  anyway,  to 
the  prevailing  competitive  system  of  distribution  wherein  the 
fittest  survive.  One  characteristic  of  fitness  is  the  ability 
to  increase  the  sale  of  a  fit  commodity  from  year  to  year  to 
such  an  extent  as  to  make  the  growing  profit  by  lessened  cost 
absorb  the  advertising  bills.  That  this  can  be  done  and  is 
being  done  in  not  a  few  instances  I  am  sure. 

I  take  pleasure  in  amplifying  a  little  the  idea  behind  our 
trade  paper  advertising  carrying  the  headline,  "Who  Pays  for 
Our  Advertising.''"  A  warning  or  confession  is  in  order,  how- 
ever, lest  you  be  misled  into  supposing  that  our  statements 
in  that  advertisement  are  based  on  elaborate  analyses  of 
costs  for  the  last  twenty  years.  This  is  not  the  case.  How- 
ever much  this  admission  may  undermine  confidence  in 
our  conclusions  in  your  mind,  we  ourselves  think  we  know 
that  our  customers  and  dealers  do  not  pay  for  our  adver- 
tising. 

Some  years  ago  at  one  of  the  few  meetings  of  the  lamented 
I.  A.  A.,  at  the  Waldorf,  the  writer  lifted  up  his  voice  to 
protest  against  the  dictum  that  the  consumer  always  pays 
for    the   advertising.      Jeers   and   incredulity   were   the    only 


*Pnnters  Ink,  October  6,  1910,  p.  24. 


456        ADVERTISING  AS  A  BUSINESS  FORCE 

answers  he  got,  but  since  then  there  has  been  a  noticeable 
change  amongst  writers  on  advertising  and  the  light  seems 
to  be  breaking. 

Twenty  years  ago  Lowney's  Chocolates  sold  for  sixty  cents 
a  pound  in  sealed  packages  and  were  not  advertised.  The 
average  cost  of  labor  and  materials  has  not  been  reduced  in  any 
way  sufficient  to  account  for  the  fact  that  there  is  still  a  little 
profit  in  spite  of  the  expense  of  advertising.  There  is  but 
one  obvious  conclusion.  Growth,  increase  of  quick  capital 
and  ownership  of  all  means  of  production  have  reduced  costs. 
Those  blessings  are  the  results  of  advertising  for  the  most  part. 
Superintendence,  clerk  hire  and  accounting  cost  more  in  pro- 
portion for  a  small  output  than  for  a  large  one.  The  buyer 
with  his  own  capital  at  hand  can  buy  in  larger  quantities  and 
on  better  terms  than  the  small  man. 

There  is  no  need  to  detail  the  many  ways  in  which  savings 
are  effected  by  the  growth  of  output  stimulated  by  advertising. 
One  that  will  appeal  strongly  to  every  manufacturer  who  studies 
his  problem  is  the  fact  that  sustained  intelligent  advertising 
will  make  his  machinery  more  uniformly  busy.  Think  of 
the  saving  in  costs  if  every  machine  can  be  provided  with  orders 
for  its  product  to  keep  it  working  every  hour  of  the  day  year  in 
and  year  out.  This  is  the  ideal  situation  for  the  manufacturer, 
and  there  is  no  one  thing  that  comes  so  near  bringing  about 
this  happy  situation  as  advertising  does.  Naturally  the  propor- 
tion of  advertising  expense  paid  by  the  public  differs  with 
different  commodities.  With  breakfast  foods  it  is  probably 
large;  with  patent  medicines  still  larger,  amounting  no  doubt 
to  100  per  cent. 

Consumers  buy  these  things,  however,  with  open  eyes,  knowing 

that  the  cost  of  distribution  is  large.     From  this  extreme  there 

are  all  sorts  of  variations   amongst  articles  in  the 

J^^      particular    of  what    proportion  of   advertising  the 

Advertisina  ^^^^^^^^^  P^-ys.     At  the  other  extreme  I  have  no 

on  Price   doubt   that   there   are   goods   which   have   actually 

been   cheapened   to    the   consumer   by    advertising, 

but  in  the  absence  of  facts  it  is  hazardous  to  guess.     To  give 

you  something  to  think  of  let  me  ask  whether  telephone  and 

telegraph  service  would  not  have  been  cheapened  sooner  if 

they  had  been  advertised  sooner?     How  about  the  advertising 

of   fifty- word    night   letters?     Will    not    that    advertising   by 

keeping  an  idle  plant  busy  at  night  have  the  effect  of  reducing 


DISPOSAL  OF  ADVERTISING  COSTS  457 

tolls  ultimately?  I  will  venture  the  guess  that  the  consumers 
of  Ivory  soap  have  paid  a  negligible  part  of  the  advertising  bills. 

To  be  sure  there  is  the  manufacturer  who  puts  his  price  up 
after  effecting  distribution  and  demand  by  advertising.  The 
goods  are  apt,  however,  to  be  a  patented  article  or  otherwise 
not  subject  to  competition.  In  such  case  the  consumer  pays 
the  advertising  cost  and  more.  Advertising  failures  have  to 
be  paid  for  by  some  one,  and  although  the  angel  who  provides 
the  capital  is  probably  the  chief  loser,  no  doubt  the  limited 
number  of  consumers  pay  a  good  share  in  some  cases. 

But  it  is  not  my  duty  to  speak  for  any  but  ourselves,  and 
I  claim  that  we  can  truthfully  assure  our  dealers  and  customers 
that  the  advertising  expense  does  not  come  out  of  them,  but 
out  of  the  savings  in  cost  owing  to  growth  produced  by  adver- 
tising. If  an  objector  asks,  "Why  don't  you  reduce  your  price 
then.f*"  he  is  entirely  beside  the  mark.  We  cannot  reduce 
the  price  by  dropping  publicity  without  having  to  increase  the 
price  again  because  of  increased  cost  arising  from  decreased 
demand.  Finally  I  want  to  say  that  I  am  not  confusing  the 
cost  of  salesmanship  by  advertising  with  the  cost  of  ordinary 
salesmanship.  It  is  true  that  advertising  reduces  the  cost 
of  salesmanship,  but  I  am  not  hiding  behind  the  fact.  I  claim 
that  in  our  business,  at  least,  the  record  of  all  costs  and  the 
record  of  our  prices  will  convincingly  show  that  our  advertising 
bills  are  absorbed  in  the  saving  "in  cost  of  salesmen,  superin- 
tendence, rent,  interest  and  use  of  our  plant,"  and  in  cost  of 
materials. 

As  to  our  use  of  this  argument  in  trade  journals  to  put  the 
retailer  in  better  mood  to  buy,  I  have  no  excuses  to  offer. 
The  average  grocer  misses  the  point  of  advertising.  He  thinks 
that  the  money  spent  in  advertising  might  better  be  his  in 
the  form  of  a  larger  profit  or  a  deal  so  dear  to  his  heart.  He 
does  not  realize  that  the  disorganized  competition  of  his  form 
of  business  would  not  permit  him  to  enjoy  a  larger  profit  if 
it  were  given  to  him  —  at  least  on  package  goods.  If  he  is 
becoming  more  and  more  a  mere  filler  of  baskets  he  has  his 
fellow  grocers  chiefly  to  thank  for  it.  No  manufacturer  can 
permanently  effect  distribution  through  the  grocer,  but  must 
make  his  appeal  direct  to  the  consumer.  By  the  rigid  laws 
of  trade  as  they  exist  under  present  conditions  he  has  done  all 
he  can  do  when  he  insures  the  retailer  a  fair  profit  which  does 
not  admit  of  much  cutting  and  then  further  insures  a  steady 


458        ADVERTISING  AS  A  BUSINESS  FORCE 

demand  by  advertising  to  keep  his  goods  moving  and  maintain 
a  steady  projfit  for  the  handling. 

To  the  salesman  the  complaint  is  familiar  that  the  cost  of 
advertising  comes  out  of  the  retailer  and  the  consumer.  The 
salesman,  of  course,  uses  the  perfectly  valid  argument  that  there 
is  a  saving  of  time  and  in  the  end  a  greater  profit  in  selling 
goods  that  are  easy  to  sell  because  they  are  advertised,  rather 
than  in  wasting  time  by  trying  to  push  the  unadvertised. 
But  the  salesman  is  not  in  the  position  to  say  with  the  authority 
with  which  we  can  say  it  that  the  cost  of  advertising  is  absorbed 
in  the  growth  of  the  business  and  does  not  come  out  of  the 
grocer.  Why,  then,  is  it  not,  good  trade  advertising  to  try  to 
educate  the  retailer  out  of  a  mistaken  notion  that  he  is  being 
buncoed.'^  By  all  means  let  us  appeal  to  the  retailer  in  the  most 
effective  way  we  can  and  let  us  join  hands  in  making  a  better 
business  man  out  of  him. 

A  somewhat  broad  discussion  of  the  question  of  payment 
of  advertising  costs  is  that  written  by  C.  L.  Grigg  of  the  Norvell- 
Shapleigh  Hardware  Company,  of  St.  Louis.  It  is  a  question 
whether  all  of  Mr.  Grigg's  illustrations  are  well  drawn,  but 
his  discussion  is  extremely  suggestive.  Among  the  suggestions 
contained  in  it  none  is  more  important  than  the  implication 
which  he  makes  that  part  of  the  cost  of  advertising  appeal  is 
taken  care  of  by  the  social  advantage  inhering  in  new  wants. 
This  recalls  us  to  the  point  made  in  our  discussion  on  the 
Effects  of  Advertising  on  the  Consumer.  This  point  is  the 
fact  that  the  really  important  question  in  regard  to  advertising 
is  not:  "Wlio  finally  pays  the  $600,000,000  spent  in  adver- 
tising?" but  "What  is  the  economic  effect  upon  the  community 
of  all  of  these  appeals  designed  to  stimulate  wants.?  "  Mr.  Grigg 
says 

*"Who  pays  for  advertising?" 

Let  this  question  read,  "Who  pays  for  creative  advertising?" 
and  the  answer  is  simple.  All  who  benefit  by  creative  adver- 
tising pay  for  it. 

*Printers'  Ink,  July  27,  1911,  p.  30. 


DISPOSAL  OF  ADVERTISING  COSTS  459 

While  the  benefit  may  be  direct  to  the  individual  consumer 
in  the  way  of  quality,  style,  service  and  the  resulting  satis- 
faction  derived  from   the  article  advertised,  society 

Social     ^^  large  benefits  by  the  improved  social  conditions. 
AdvertiJng     The  safety  razor  advertising  has  made  us  a  nation 
of  clean  faces;  of  daily  shaving.     Society  as  a  whole 
has  benefited.     A  clean-shaven  man  becomes  a  better  man  — 
a  better  man  to  see  at  least,  and  is  usually  more  likable. 

Creative  advertising  made  the  market  for  safety  razors. 
The  advertising  of  safety  razors  should  not  be  charged  to  the 
razors  nor  to  the  individual,  but  to  social  uplift. 

The  demand  for  clean  faces  had  been  latent  in  the  public  for 
years.  The  cost  in  money,  time  and  trouble  of  visiting  the 
barber  daily  prevented  the  early  realization. 

Advertising  made  the  market  and  by  educating  society  to 
the  safe,  pleasant,  and  economical  shaving  process,  made  the 
safety  razor. 

Advertising  not  only  awakened  the  latent  desire,  but  so 
cheapened  the  process  as  to  make  the  one-time  luxury  a  common 
necessity. 

Creative  advertising  is  telling  the  public  of  a  thing  good  for 
society  as  a  whole. 

Competitive  advertising,  on  the  other  hand,  tells  the  public, 
after  the  desire  is  created,  "This  is  just  as  good,"  then  fails 
to  deliver  the  goods.  It  benefits  no  one.  It  causes  the  novice 
in  the  use  of  the  thing  advertised  to  lose  faith,  and  is  a  danger 
to  society  as  it  deceives,  discourages  and  destroys  the  educa- 
tional work  of  creative  advertising.  This  sort  of  advertising 
is  economical  waste. 

The  high  cost  of  living  is  the  result  of  businesslike  readjust- 
ment of  distribution.  For  years  the  rule  was  to  make  luxuries 
bear  the  cost  of  distributing  necessities.  As  luxuries  grew 
into  necessities,  the  price  was  lowered  by  competition  and 
other  luxuries  were  expected  to  provide  the  net  profit. 

Advertising  has  converted  so  many  of  the  former  luxuries 
into  necessities  that  the  readjustment  of  distributing  cost 
becomes  necessary.  Business  resolved  to  make  everything 
carry  its  own  cost  and  in  the  readjustment  staples  were  put 
on  their  cost,  resulting  in  high  prices  on  the  unadvertised  staples. 

Of  all  the  articles  that  have  advanced  in  price,  adver- 
tised articles  show  the  least  advance,  while  the  unadvertised 
staples  show  the  greatest  advance.      That  creative  advertis- 


460        ADVERTISING  AS  A  BUSINESS  FORCE 

ing  does  not  cost  society  a  penny  is  conclusively  proven  by  this 
one  fact. 

Last  spring  the  packers  took  a  four-million-dollar  loss  on 
eggs.  Had  they  organized  and  spent  one  million  dollars  in 
making  a  market;  in  telling  the  public  that  eggs  at  the  price 
were  yet  the  most  economical  food;  telling  them  how  to  use 
eggs  in  new  ways  and  educating  the  public,  they  would  have 
saved  three  million  dollars  and  at  the  same  time  have  estab- 
lished a  staple  market. 

The  result  of  that  break  in  prices  has  been  a  general  demor- 
alization of  all  factors  identified  with  the  production  and 
distribution  of  eggs.  Instead  of  four  million  dollars  loss, 
several  times  four  millions  dollars  has  been  lost  this  season 
by  the  men  who  own  the  chickens.  A  million-dollar  campaign 
would  have  made  a  market,  not  only  for  the  stored  goods 
but  for  all  that  have  followed. 

REVIEW   QUESTIONS —  CHAPTER  XIII 

1.  How  is  advertising  outlay  covered  by  reduction  in  pro- 
duction and  selling  costs  ? 

2.  How  is  advertising  outlay  treated  by  accountants.'* 
Which  theory  about  this  do  you  consider  safest? 

3.  When  does  advertising  outlay  cease  to  be  an  expense 
and  become  an  investment.? 

PROBLEM   QUESTIONS  —  CHAPTER  XIII 

1.  One  big  electric  manufacturing  concern  figures  its  "good- 
will" at  $6,000,000  among  its  assets,  another  with  patents  quite 
as  valuable  figures  its  good  will  at  $1.  Which  would  you  con- 
sider to  be  the  better  policy  if  all  other  conditions  were  equal  ? 

2.  If  advertising,  by  increasing  output,  brings*  down  produc- 
tion and  distribution  expenses  and  increases  total  profits  of 
makers  and  distributors,  is  the  consumer  "paying"  for  the 
advertising  because  the  price  to  him  is  not  reduced?  If  the 
quality  of  the  goods  is  bettered,  or  the  quality  of  sales-service 
is  improved  can  these  be  considered  as  part  of  the  consumer's 
return  for  the  maintained  price? 


CHAPTER  XIV 

THE  ADVERTISING  MANAGER 

IN  the  case  of  the  Multigraph  Sales  Company  we  saw  the 
advertising  manager  working  side  by  side  with  the  sales 
manager.  While  this  degree  of  emphasis  on  the  adver- 
tising manager's  importance  may  not  be  feasible  in  all  lines 
of  business,  its  success  in  the  case  of  this  company  shows 
something  of  its  possibilities. 

Whether  the  advertising  manager  is  ranked  as  one  of  the 
planning  heads  of  the  concern  or  not,  it  is  becoming  increas- 
ingly evident  that  his  work  no  longer  can  be  regarded  as  a  mere 
incident  in  the  selling  plans  of  most  companies.  This  means, 
of  course,  that  there  is  coming  to  be  a  much  better  under- 
standing than  has  prevailed  of  the  uses  and  possibilities  of 
advertising  on  the  part  of  the  sales  manager,  and  at  the  same 
time  it  means  that  the  advertising  manager  is  going  to  find 
increasing  need  for  a  proper  understanding  of  selling  problems. 

THE  WORK  OF  THE  ADVERTISING  MANAGER 

Myrtle  Tower  Snell,  who  is  on  the  staff  of  George  B.  Spencer, 
in  New  York  City,  has  the  following  to  say  about  what  an 
advertising  manager  ought  to  know  about  selling  conditions: 
This  is  told  under  the  title:  "What  a  Woman  Saw  from 
Behind  the  Counter." 

*The  letter  from  Mr.  Judson  in  your  October  19th  issue 
interested  me.  Mr.  Judson's  idea  that  advertising  managers 
should  go  behind  the  counter  in  search  of  light  on  their  sales 

*Pnnters'  Ink,  November  9,  1911,  p.  44. 

461 


462        ADVERTISING  AS  A  BUSINESS  FORCE 

and  distribution  problems  has  been  acted  upon,  I  imagine, 
more  times  than  he  happens  to  have  a  record  of. 

I  don't  know  at  all  if  you  want  to  hear  from  a  woman  on 
this  subject,  but  the  fact  remains  that  I  have  had  some 
rather  illuminating  experiences  along  the  line  suggested  by  Mr. 
Judson. 

For  example,  in  my  capacity  as  advertising  counsel,  I  have 
been  called  upon  to  diagnose  and  prescribe  for  sick  store 
departments,  upon  many  occasions.  In  such  cases  it  is  a  part 
of  my  plan  to  hang  up  my  hat  and  go  on  the  floor  or  behind 
the  counter  as  a  saleswoman  in  the  department  needing  help. 
In  this  way  I  get  at  the  actual  facts  from  every  view-point, 
including  my  own.  I  am  able  to  suggest  to  the  merchant 
what  I  believe  to  be  best  from  actual  experience  in  his  own 
store. 

I  fully  agree  with  Mr.  Johns  in  his  article  [see  p.  465]  on  "The 
Real  Functions  of  an  Advertising  Manager."  "  Show  me  an  ad- 
vertising manager  who  cannot  take  a  sample  case  and  go  out 
on  the  road  and  personally  sell  a  bill  of  goods,  and  I  will  show 
you  one  who  is  superficial  in  practically  everything  else  he 
does,  except  split  infinitives,  or  the  proportion  of  top  and  side 
margins  on  a  two-color  mailing  card." 

And,  by  the  same  unfailing  token,  show  me  an  advertising 
manager  who  cannot  go  on  the  floor  of  a  store  or  behind  the 
counter  and  sell  to  the  consumer  the  goods  manufactured  by 
his  house,  and  I  will  show  you  an  advertising  manager  who 
has  no  business  to  attempt  to  formulate  the  selling  policy  for 
the  merchant  who  buys  his  goods,  or  to  suggest  selling  plans 
for  him. 

Such  an  advertising  manager  is  not  even  capable  of  writing 
newspaper  copy  for  his  merchants.  His  efforts  are  at  best 
only  theories,  he  doesn't  hnoic  what  he  knows,  and  his  guess- 
work makes  his  experiments  expensive,  both  for  his  house  and 
its  customers. 

If  I  had  space  I  could  tell  you  the  actual  vital  facts  brought 
to  light  through  my  experiences  behind  the  counter  while 
making  these  investigations. 

I  could  tell  you  of  the  infinite  possibilities  which  that 
method  has  revealed  for  the  sort  of  co-operation  that  means  a 
priceless  gain  to  both  merchant  and  manufacturer,  and  of 
how  tremendously  it  eliminates  friction  and  promotes  good 
feeling.     ,     .     . 


THE  ADVERTISING  MANAGER  463 

In  some  instances  the  man  behind  the  gun,  who,  in  large 
measure,  controls  the  buying  in  these  stores,  is  not  familiar 
enough  with  the  conditions  surrounding  his  own  business. 
He  will  often  accept  the  judgment  of  the  outside  counsel,  when 
the  opinions  of  his  own  people  would  be  ignored.  This  happens 
in  the  smaller  cities  where  the  merchant  is  the  nominal  head 
of  all  departments. 

In  one  instance,  I  found  this  most  interesting  phase  of  the 
problem:  A  member  of  the  firm,  who  has  died  within  the  past 
few  years,  had  influenced  and  attracted  to  his  store  a  large 
foreign  trade.  Since  his  death,  the  patronage  of  the  store  had 
been  undergoing  a  sort  of  transformation.  When  I  went  on 
the  floor,  I  found  we  were  serving  the  wives  of  professional  and 
political  men  —  members  of  the  best  families  of  the  town. 

The  merchant  was  on  the  ground  all  the  time,  day  after  day 

and  week  after  week,  and  was  scarcely  conscious  of  the  change 

.that  was  gradually  taking  place  in  his  business.     He 

^/'^'^rw^  realized  dimly  that   the    stock  they  used  to  carry 

^^to  the  *  *i^^^'t  seem  to  be  so  readily  disposed  of  as  in  other 

Market  years  —  and  he  wondered  why.  He  was  trying  to 
fit  a  medium  and  low  grade  stock  to  a  high  class 
trade,  and  it  was  distinctly  a  misfit. 

The  change  was  vital,  both  to  him  and  his  buyers,  and  even 
more  vital  to  the  manufacturers  selling  him  his  stock. 

How  could  the  manufacturer  or  his  advertising  manager 
know  such  conditions  without  getting  directly  into  the  fray 
and  digging  them  up  for  himself? 

True  enough,  the  manufacturer's  salesman  goes  to  the  town 
probably  four  times  a  year  or  more.  But  he  opens  up  his 
samples  down  at  the  Dingley  House  or  up  on  the  top  floor 
of  the  building,  and  he  carries  away  what  information  the 
proprietor  and  his  buyers  choose  to  give  him. 

If  he  chance  to  be  very  wide  awake  he'll  make  some  observa- 
tions for  himself  while  he's  waiting  for  the  department  head 
to  get  through  with  one  of  his  personal  friends.  But  even 
then  he's  an  alien,  he  doesn't  belong. 

And,  on  the  other  side  of  the  question,  when  he  goes  back 
to  the  house,  loaded  to  the  guards  with  information  that  he 
swears  the  house  has  got  to  listen  to  —  what  happens? 

The  advertising  manager  is  generally  pretty  busy  and  he 
asks  the  salesman  to  please  put  his  information  in  writing. 

By  the  time  the  salesman  has  floundered  through  the  un- 


464        ADVERTISING  AS  A  BUSINESS  FORCE 

accustomed  task  of  writing  out  his  ideas,  when  his  stock  in 
trade  is  his  winning  way  of  talking  —  well,  you  can  imagine 
the  result  when  it  reaches  the  advertising  manager's  desk. 
Its  very  brightest  chance  for  life  is  to  be  filed  away  in  a  pigeon- 
hole under  "Suggestions  from  House  Salesmen,"  to  be  taken 
up  when  there  is  nothing  immediate  pressing;  which  heavenly 
state,  by  the  way,  the  ordinary  advertising  manager  seldom 
arrives  at  this  side  the  little  door. 

And  yet,  these  small-town  conditions  constitute  an  issue 
which  must  be  met  and  reckoned  with  in  almost  every  sales- 
and-distribution  problem. 

In  one  instance,  a  brief  stay  on  the  ground  of  one  of  our 
merchants  brought  to  light  friction  between  our  rather  tactless 
salesman  and  the  woman  head  of  the  stock. 

What  then?  We  might  have  wasted  tons  of  advertising 
matter  trying  to  cram  our  goods  down  the  throats  of  that 
house  all  to  no  purpose.     Some  other  method  must  be  applied. 

Again,  one  manufacturing  concern  had  been  working  for 
years  to  induce  merchants  to  handle  its  product  exclusively, 
in  that  line.  A  few  trips  among  the  stores  of  the  merchants,  a 
few  hours  sometimes  on  the  floor,  convinced  me  that  one 
merchant  in  ten  could  make  a  success  of  a  department  con- 
fined to  that  one  line.  And  if  the  department  was  not  a 
success,  what  use  could  the  store  be  to  the  manufacturer.'' 

It  meant  simply  one  of  two  things  —  increasing  the  manu- 
facturer's line  to  give  it  greater  variety,  or  specializing  on 
their  present  line  and  pushing  it  as  "a  specialty." 

Such  information  as  this,  I  consider,  is  necessary  for  the 

advertising  manager  to  have  as  a  foundation  upon  which  to 

J, J        build  practical  plans  and  campaigns.     And  I  do  not 

Informa-  believe   his    department   will   ever   reach  its   fullest 

Hon  the  efficiency  until  he  is  in  possession  of  just  such 
Advertising  information,  gained  through  his  own  experience. 
-^^"'J^''  Even  his  light  upon  the  subject  gained  through 
his  national  advertising  will  be  clearing  and  more 
searching,  his  appeal  will  be  more  direct,  his  argument  more 
convincing,  because  he  has  faced  his  customers  with  his  product 
in  his  hands. 

Somehow  this  direct  personal  contact  with  actual  sales  sweeps 
away  all  the  advertising  manager  s  fine  literary  illusions,  pricks 
the  bubble  of  his  impractical  theories  and  clears  his  vision.  In 
his  plans  and  his  copy  he  has  deduced,  or  better,  has  elevated. 


THE  ADVERTISING  MANAGER  465 

himself  to  fundamentals,  to  first  principles,  to  true  salesman- 
ship, which  is  all  advertising  is  or  ever  can  be. 

Let  the  advertising  manager  get  out  and  sell  goods  on  the 
road  and  behind  the  counter.  If  it  doesn't  accomplish  another 
earthly  thing,  he  will  find  that  it  will  lessen  the  friction  between 
himself  and  the  sales  force,  both  wholesale  and  retail,  for- 
evermore.  And  his  understanding  of  their  problems,  trans- 
formed from  fairy  tales  to  everyday  facts,  will  make  a  mighty 
sight  better  advertising  manager  of  him  and  an  infinitely 
broader  and  more  helpful  man,  both  commercially  and  per- 
sonally. 

William  H.  Johns,  vice-president  of  the  George  Batten 
Company,  in  discussing  what  he  calls  the  "real  function  of  an 
advertising  manager,"  gives  one  or  two  illustrations  of  what  the 
advertising  manager's  services  are  coming  to  include  under 
present-day  selling  conditions. 

*The  advertising  manager  of  a  nationally  advertised  propo- 
sition, placing  his  business  through  a  responsible  advertising 
agency,  is  in  a  position  to  further  or  hinder  a  success,  according 
to  his  conception  of  his  proper  function. 

It  is  true  that  a  success  is  sometimes  made  by  sheer  force  of 
other  influences,  in  spite  of  the  advertising  manager,  who, 
in  such  cases,  bears  the  title  without  fulfilling  the  real  functions 
which  might  be  reasonably  assumed  as  belonging  to  the  office. 

And,  again,  the  advertising  man  stands  as  a  connecting  link 
between  conflicting  forces,  and  by  acting  as  a  deciding  vote 
can  often  swing  policies  and  plans  in  the  direction  of  success, 
in  spite  of  other  influences  that  otherwise  would  hamper  the 
business. 

I  recently  had  occasion  to  give  considerable  thought  to  the 
question,  "What  part  of  an  advertising  manager's  work  should 
be  personally  performed  by  him.'^"  —  that  being  the  subject 
under  discussion  before  the  Technical  Publicity  Association 
of  New  York  in  which  discussion  I  was  asked  to  participate. 
In  this  connection  I  had  occasion  to  consider  in  writing,  in  a 
general  way,  what  his  proper  functions  are,  how  he  should  co- 
operate with  the  sales  department,  and  how  his  work  should 
fit  in  with  the  work  of  the  advertising  agency. 

*Printers  Ink,  October  19,  1911,  p.  3. 


466        ADVERTISING  AS  A  BUSINESS  FORCE 

Of  course,  in  the  last  analysis,  it  all  depends  on  the  man 
and  the  proposition  and  the  agency,  and  the  temperament  of 
the  principles  of  the  business  advertised;  and  yet,  within  the 
limits  of  the  typical  advertised  proposition,  and  the  typical 
advertising  manager,  there  are  certain  general  observations 
that  may  be  worth  noting. 

The  advertising  manager  soon  discovers  that  there  are  but 
twenty-four  hours  in  a  day,  and  that  even  if  he  uses  all  of  them, 
he  can't  do  everything  personally,  and  the  question  comes  up: 
"What  part  of  the  work  should  he  do  himself?" 

It  is  the  privilege  of  any  man  in  such  a  position  to  experiment 
a  little  before  finally  adjusting  himself,  and  in  fact  nothing 
but  experiment  and  experience  can  show  him  where  he  can 
apply  his  personal  efforts  with  the  assurance  that  they  will 
count  for  the  most. 

With  all  these  and  similar  modifying  considerations  out  of 

the  way,  he  finds,  if   he  rises   to   the   proper   conception   of 

Tp,     ,,     his    position,   that    there   are    certain   things   which 

Adoertis-  ^^  simply  cannot  delegate,  and  yet  retain  the  inner 

ing        conviction  that  he  really  is  what  his  title  proclaims 

Manager   him  to  be. 

Cannot  jj^  ^]^g  gj.^^  place  he  must  have  the  "vision" 
e  ega  e  ^^  ^j^^  proposition  and  its  relation  to  the  public. 
Without  it  he  is  sure  to  be  a  hinde  ranee  rather  than  a 
help  to  the  business.  But  to  get  it  he  must  study  the 
business  in  all  its  phases,  talking  with  the  factory  fore- 
man, the  salesman  on  the  road,  the  sales  manager,  the 
president,  the  comptroller,  and  wherever  possible  with  typ- 
ical consumers.  He  must  know  as  nearly  as  possible  what 
the  dealer  thinks,  and  how  much  inertia  there  is  to  overcome 
in  getting  the  dealer  to  give  distinctive  attention  to  his  goods. 
He  must  certainly  know  something  of  competitive  products, 
and  what  is  being  done  with  them.  He  must  work  hard  for 
this  because  truly  vital  information  doesn't  lie  on  the  surface 
to  be  scooped  up  with  a  spoon  in  passing.  Without  this  con- 
ception of  the  proposition  his  judgment  is  warped  and  ineffi- 
cient, and  is  more  likely  to  put  the  emphasis  in  the  WTong  place 
than  it  is  to  hit  upon  the  right  idea.  And  yet,  having  the 
title  of  an  advertising  manager,  his  opinions  are  apt  to  be 
given  fuller  credit,  both  by  his  principles,  and  his  agency,  than 
his  actual  knowledge  warrants. 

Now,  if  he  sets  himself  to  get  this  adequate  conception  of  the 


THE  ADVERTISING  MANAGER  4(i7 

proposition,  as  a  basis  for  sound  judgment,  he  simply  cannot 
and  must  not  spend  all  his  time  at  his  desk  mulling  over  papers. 
And  yet  there  are  alwaj'^s  papers  that  must  be  mulled  over, 
and  it  becomes  his  problem  to  know  where  to  draw  the  line. 
He  will  find  that  certain  kinds  of  papers  give  vital  information, 
that  go  to  develop  sound  judgment,  and  these  he  certainly 
cannot  afford  to  pass  over.  And  certain  other  papers  need 
his  attention  because  they  afford  an  opportunity  to  utilize 
his  judgment  at  a  vital  point,  and  that  being  the  main  reason 
for  acquiring  that  judgment,  it  follows  that  this  is  certainly 
a  part  of  his  work. 

But  show  me  an  advertising  manager  who  cannot  take  a 
sample  case  and  go  out  on  the  road  and  personally  sell  a  bill 
of  his  goods,  and  I  will  show  you  one  who  is  superficial  on 
practically  everything  else  he  does,  except  perhaps  the  question 
of  split  infinitives,  or  the  proportion  of  top  and  side  margins 
on  a  two-color  mailing  card. 

Somebody  has  got  to  stand  pat  on  the  question  of  policy. 

When  a  plan  has  been  agreed  upon,  somebody  has  to  see  to 

it  that  it  is  carried  out,  and  that  it  is  not  deflected 

Carrying  \yy  clever  advertising  solicitation,  nor  by  the  chance 

Selling     suggestions  of  some  one  who  either  hasn't  thought 

Policy  deeply  into  the  matter,  or  who  has  another  way  of 
doing  it  that  may  be  no  better.  And  somebody  has 
to  know  when  a  plan  has  been  tried  out  enough  to  change,  or 
go  ahead  with  on  a  bigger  scale.  If  it  is  the  province  of  an 
advertising  agency  to  keep  one  eye  open  for  the  time  to  change 
a  plan,  it  is  the  rightfid  duty  of  the  advertising  manager  to 
keep  both  eyes  open,  and  both  ears  open,  and  his  finger  on 
the  pulse  of  the  consumer,  with  an  occasional  look  at  his  tongue. 

Somebody  has  got  to  outline  the  campaign.  But  as  this 
involves  so  much  more  than  the  average  advertising  mana- 
ger has  ever  personally  had  an  opportunity  to  learn,  it  can 
be  done  best  only  through  conferences.  The  advertising 
manager  should  have  enough  of  that  vision  to  make  tentative 
plans,  as  a  basis  for  discussion,  and  yet  enough  good  judgment 
to  understand  that  his  vision  cannot  cover  the  whole  thing. 
Here  is  where  the  sales  manager  needs  to  be  brought  into  the 
advertising.  And  it  is  where  the  advertising  manager  has 
that  much-talked-of  chance  to  co-operate  with  the  sales 
manager.  And,  again,  here  is  where  an  agency,  by  reason  of 
its    accumulated    experience    in    hundreds    of    campaigns,    is 


468        ADVERTISING  AS  A  BUSINESS  FORCE 

entitled  to  a  thorough  hearing.  And  yet  a  sound  campaign 
must  be  based  on  facts  such  as  can  be  known  only  to  men  of 
long  experience  on  the  inside  of  business.  Hence,  the  logic 
of  a  conference  in  which  the  president,  the  advertising  man- 
ager, the  sales  manager,  and  the  advertising  agent  all  have  a 
part. 

Using  mere  authority  to  enforce  decisions,  regardless  of  the 

judgment  involved,  is  the  bane  of  business  procedure.     Here  is 

where  one  type  of  advertising  manager  is  in  danger 

Taking    of  being  a  stumbling  block  instead   of  a  progressive 

^^ff^      force.     Being  a  "buyer"  in  fact,  and  yet  a  "seller" 

Others     in  theory,  he  is  prone  to  take  on  the  typical  "buyer" 

attitude  and  get  dictatorial,  pompous,   self-centred. 

I    ascribe    true   greatness    to   the    advertising    manager    who 

knows  when  he  is   a  help   and  when   he   is    a  hinderance  to 

the  success  of  his  own  proposition.     It  is  easy  enough  for  the 

advertising  manager  to  see  when  the  sales  manager,  or  the 

president,  or  the  Board  of  Directors,  are  blocking  the  progress 

of  the  business  by  mistaken  policy.     It  is  contrary  to  human 

nature  that  he  should  be  able  to  be  a  hinderance  and  know  it 

at  the  same  time.     It  is  often  possible  for  an  agency  man  to 

see  this  as  clearly  as  the  advertising  manager  can  see  how 

others  are  blocking  him. 

Not  to  have  backbone  enough  to  take  direct  issue  with  the 
opinions  of  "the  man  higher  up"  occasionally  may  often  mean 
disaster;  and  the  advertising  manager  who  can't  do  a  little 
fighting  now  and  then  to  defend  his  honest  convictions  is  a 
poor  guardian  of  the  priceless  opportunities  of  a  business. 

Some  one  asked  me  recently  if  I  did  not  believe  that  an 
agency  should  have  its  fundamental  dealings  with  the  officers 
of  the  concern,  and  only  its  detail  dealings  with  the  advertising 
manager.  My  answer  was  that  the  agency  should  deal  in 
the  basic  things  with  the  principals  as  well  as  with  the  advertis- 
ing manager.  Some  advertising  managers  change  jobs  without 
any  pangs  of  conscience,  and  yet  the  business  and  the  adver- 
tising must  go  on.  It  involves  the  fortunes  and  the  lives  of 
many  people.  Its  roots  should  certainly  go  deeper  than  the 
temporary  interests  of  any  one  man.  Any  advertising  man 
who  is  willing  to  face  these  facts,  and  put  the  success  of  the 
business  before  what  may  seem  to  be  (at  first  glance)  his  own 
personal  glory  and  achievement,  will  admit  that  this  is  so, 
and  will  take  his  rank  accordingly.     And  that  will  rank  him 


THE  ADVERTISING  MANAGER  469 

higher  —  make  him  a  bigger  man  whether  he  remains  with 
the  same  concern  or  advances  to  another. 

When  it  comes  to  selecting  mediums  the  advertising  manager 
should  have  a  hand  in  it,  but  to  attempt  to  settle  such  matters 
without  utilizing  the  preponderant  information  on 
Medium  the  subject  which  a  real  service  agency  should  have 
Selection  is  to  invite  defeat.  But  the  agency  should  be  able 
to  satisfy  his  reason  that  the  list  selected  is  the  most 
expedient,  so  that  in  the  end  the  list  is  as  much  approved  by  him, 
and  his  principals,  as  it  is  by  the  agency,  so  there  is  no  come 
back.  Whenever  an  advertising  manager,  by  virtue  of  definite 
experience,  or  even  of  opinion  based  on  sound  judgment  and 
knowledge  of  his  own  proposition,  favors  and  disfavors  certain 
mediums,  there  can  be  little  question  that  his  ideas  would  be 
given  due  weight  by  responsible  agency  men  in  making  up  a 
list.  It  is  the  function  of  an  agency  to  know  as  many  facts  as 
possible  before  deciding,  and  on  every  proposition  the  adver- 
tising manager  should  be  able  to  supplement  the  facts  already 
in  hand. 

Whether  the  copy  should  be  written  by  the  advertising 
man  or  by  the  agency  depends  largely  on  circumstances.  If 
the  advertising  manager  can  always  write  better  copy  than 
the  agency  he  ought  to  do  it,  or  change  his  agency.  But  in 
any  event,  the  actual  writing  of  copy  is  secondary  to  the  deci- 
sion as  to  what  points  shall  bear  the  emphasis,  what  appeal 
shall  be  used,  and  what  method  there  shall  be  of  connecting 
up  the  advertising  with  the  trade.  In  this  decision  the  "  vision  " 
of  the  advertising  manager,  his  accumulated  experience,  and 
his  more  intimate  knowledge  of  the  real  selling  problem  should 
all  have  an  important  place,  as  also  should  the  experience  and 
judgment  of  agency  men.  Copy  should  embody  the  best 
judgment  of  all  concerned,  no  matter  who  pens  the  text. 

Ninety-nine  out  of  every  one  hundred  good  advertisements 
are  an  evolution  and  not  an  inspiration. 

So  my  word  to  the  advertising  manager  on  this  point  is 
that  he  should  take  hold  where  he  can  lift  the  most,  and  keep 
out  of  the  way  of  men  who  might  be  able  to  lift  more  than 
he  can.  As  much  credit  is  due  to  an  advertising  manager  for 
knowang  when  to  step  out  of  the  way  and  let  a  big  thing  go  past 
him  as  there  is  due  for  starting  a  big  thing  himself. 

Much  is  said  about  the  co-operation  of  the  advertising  and 
selling  forces.     In  certain  directions  there  is  a  tendency    to 


470        ADVERTISING  AS  A  BUSINESS  FORCE 

combine  the  two  positions  into  one.  But  in  any  event  there  is 
a  great  need,  and  an  adequate  tendency,  for  the  two  depart- 
ments to  work  hand  in  glove.  But  it  takes  a  differ- 
Advcrtising  Q^)^  tjq^e  of  mind  to  get  the  maximum  efficiency 
^Co-opera-  °^^  ^^  either  the  advertising  department  or  the  sales 
tion  department,  and  this  fact  (and  it  is  a  fact)  should 
determine  how  far  the  two  departments  should  tend 
to  combine.  But  I  do  believe  that  it  is  clearly  within  the 
functions  of  an  advertising  manager  to  be  the  connecting  link 
that  will  insure  real  co-operation  between  the  selling  force  and 
the  selling  plan,  and  this  does  not  always  mean  getting  the 
selling  department  to  see  his  way,  but  sometimes  for  him  to 
find  out  by  actual  contact  what  the  real  problems  of  the  selling 
department  are,  and  shape  his  own  work  to  meet  those  con- 
ditions. 

If  the  advertising  manager  rises  to  the  occasion,  and  forms 
his  connecting  link,  his  very  position  in  the  matter  will  answer 
the  question  as  to  what  part  he  should  personally  perform  in 
the  follow-up  work,  co-operation  with  the  selling  force,  getting 
in  close  touch  with  typical  customers  and  getting  the  selling 
force  to  make  the  most  of  the  advertising.  If  he  doesn't  rise 
to  the  occasion,  and  is  content  to  peg  along  with  detail  that 
might  be  delegated  to  subordinates,  then  it  is  only  a  question 
of  time  till  he  loses  interest  and  decides  he  would  rather  adver- 
tise breakfast  foods  than  automobiles,  and  so  it  doesn't  matter 
to  him  who  is  the  real  fountain  of  interest  in  making  the 
advertising  utilize  its  full  opportunity.  One  thing  is  certain, 
and  that  is  that  the  follow-up  system  which  coins  advertising 
ore  into  dollars  should  be  in  the  hands  of  the  man  who  really 
cares.  If  that  is  the  advertising  manager,  all  right.  If  it 
isn't,  why  let  it  be  done  by  some  one  who  does  care. 

If  I  were  to  gather  up  all  my  impressions  as  to  the  proper 
function  of  an  advertising  manager,  within  the  limits  above 
agreed  upon,  I  should  say  that  he  should  partake  something  of 
the  nature  of  a  barometer,  something  of  the  dynamo,  something 
of  the  pilot  on  the  ship,  something  of  the  governor  on  an 
engine,  something  of  the  orchestra  conductor,  something  of 
the  editor  of  a  newspaper,  something  of  the  detective,  some- 
thing of  the  promoter,  and  something  of  the  bystander. 

The  conception  of  the  function  of  an  advertising  manager 
is  rising  in  the  scale.  It  means  more  to  be  a  real  advertising 
manager  to-day  than  it  did  ten  years  ago.     And  it  will  mean 


THE  ADVERTISING  MANAGER  471 

more  the  next  few  years  than  it  does  now.  The  question  is, 
are  the  men  in  positions  of  advertising  managers  rising  to 
the  occasion,  and  growing  as  fast  as  the  business  and  its  needs 
are  growing.  For  to  be  an  advertising  manager  certainly  means 
to  keep  pace  with  the  needs  and  opportunities  of  the  business. 

This  idea  of  the  broadening  scope  of  the  advertising  manager 
is  carried  out  somewhat  more  fully  from  the  standpoint  of  the 
advertising  manager  himself,  in  an  address  before  the  Technical 
Publicity  Association  in  New  York  City,  on  October  12,  1911, 
by  Charles  E.  Jones,  formerly  advertising  manager  of  the 
National  Cash  Register  Company : 

*The  subject  assigned  to  me,  "The  Scope  of  the  Advertising 
Manager,"  is  an  extraordinary  one,  because  the  interpretation 
must  be  individual.     .     .     . 

Seriously  speaking,  an  advertising  manager's  scope  is  all 
that  he  has  given  him  and  then  whatever  he  can  or  should  annex. 

You  see  that  I  am  interpreting  scope  roughly  to  mean 
latitude,  and  every  advertising  manager  must  have  latitude 
enough  to  accomplish  his  ends.  To  have  a  good  advertising 
department  means  time,  and  for  an  advertising  man  to  have 
a  good  boss  means  time. 

He  may  have  to  change  the  name  of  the  product  —  he  should 
if  necessary.  He  may  have  to  change  the  product,  he  may 
have  to  change  the  policy  of  the  house,  or  he  may  have  to 
create  a  name  or  a  product  or  a  policy.  All  these  things  I 
believe  come  strictly  within  the  scope  of  the  advertising  man- 
ager, and  if  he  is  what  he  should  be  he  has  a  more  aesthetic 
taste  and  a  more  sensitive  taste  than  any  one  else  in  the  organi- 
zation. 

However,  to  be  aesthetic  or  sensitive  does  not  release  him 
from  the  responsibility  of  being  practical  and  sensible.     To 

think  correctly  is  success. 
TheNeed  There  was  a  story  about  George  L.  Dyer,  which 
Practical  ^^^^  ^^^  become  a  classic  in  the  annals  or  lore  of 
advertising,  that  had  to  do  with  some  advertise- 
ments he  wrote  for  Hart,  Schaffner  &  Marx.  It  goes  without 
saying  the  advertisements  were   good;  in  fact  they  were  so 

*Printers  Ink,  October  19,  1911,  p.  58. 


472        ADVERTISING  AS  A  BUSINESS  FORCE 

good  that  Mr.  Schaffner,  of  the  firm,  sighed  as  he  said:  "I 
wish  our  merchandise  was  equal." 

In  an  instant  Mr.  Dyer  was  back  at  him  and  said:  "Make 
your  merchandise  as  good  as  these  advertisements.  Merchan- 
dise less  worthy  will  not  sell,  and  you  must  not  publish  these 
advertisements  until  the  merchandise  is  up  to  them." 

An  automobile  owner,  driving  a  car  the  other  night,  said: 
"I  wish  this  car  was  as  good  as  the  firm's  advertising." 

It  struck  me  that  that  advertising  manager  was  under  a 
tremendous  handicap  —  that  he  was  doomed  to  find  another 
job  before  long,  because  his  concern  would  have  to  go  into 
the  discard,  and  if  he  is  not  careful,  he  will  find  himself 
associated  in  the  minds  of  people  as  having  been  responsible 
for  a  failure. 

And  so  I  say  the  advertising  manager  should  have  a  scope 
and  a  latitude  sufficient  to  make  his  concern's  product  or  service 
equal  to  the  best  on  the  market. 

He  surely  must  have  scope  enough  to  make  good  for  the 
house  and  he  must  take  enough  to  make  good  for  himself.   .    .    . 

There  are  a  great  many  things  in  modem  business  that  call 
for  dramatic  action.  They  are  things  that  should  be  done 
with  a  hope  that  they  will  be  satisfactory,  and  when  it  is  possible 
it  is  well  to  arrange  to  take  care  of  the  results  in  emergencies. 

I  know  of  an  advertising  manager  who,  entering  upon  his 
duties,  found  fault  with  the  guarantee  that  the  concern  put 

When  a    upon    its    goods    and    he    wished   to  change   it  to 

Guarantee  make  it  more  liberal  —  to  make  it  so  liberal  that 

Was      it  was  a  sales  argument.     Without  questioning  his 

Changed  latitude  in  the  matter  he  did  this,  only  to  be  repri- 
manded by  his  boss. 

He  said:  "Why  did  you  change  our  guarantee.^  That 
guarantee  was  drawn  up  by  our  lawyer.  It  is  hard  for  a  man 
to  get  around  it."  The  advertising  manager  looked  the  boss 
in  the  eye  and  said:  "We  have  no  feud  with  our  prospects 
and  with  our  customers.  Let  us  treat  them  as  though  they  were 
part  of  our  family." 

Another  case:  An  advertising  man  was  called  upon  to 
increase  the  sales  and  also  the  profit  of  a  by-product  that  had 
been  managed  by  another  for  twenty  years.  The  sales  were 
meagre  and  the  profit  was  always  taken  uj)  in  the  selling  expense. 
He  offered  a  complete  change  in  method  to  the  management 
who  met  his  plan  with  this  remark :     "  Why  we  have  been  doing 


THE  ADVERTISING  MANAGER  473 

this  for  twenty  years."  The  advertising  manager  smiled  and 
said:     "That  ought  to  satisfy  you." 

When  I  took  charge  of  the  advertising  department  of  the 
National  Cash  Register  Company,  they  had  been  without  an 
active  head  in  that  department  for  some  three  months,  and 
things  were  at  sixes  and  sevens.  The  work  was  behind.  It 
was  Mr.  Chalmers'  earnest  desire  that  by  a  certain  time  the 
work  would  be  caught  up. 

As  you  may  know,  we  had  our  own  printing  plant,  which 
was  thoroughly  equipped  and  sufficient  to  get  out  a  daily, 
which  was  sent  to  our  salesmen;  a  weekly,  which  went  to 
5,000  people  of  the  factory;  several  monthlies  for  different  pur- 
poses; a  house-organ  that  went  to  a  mailing  list  of  a  million; 
and  in  addition  to  this,  catalogues,  sundry  booklets  and  supplies. 

The  work  was  balled  up.  I  had  the  problem  of  straightening 
it  out.  Those  things  that  were  started  would  have  to  be 
finished  and  new  things  would  have  to  be  put  in  process. 

I  never  have  met  a  more  liberal  concern,  a  concern  more  will- 
ing to  spend  money  or  to  do  things  to  accomplish  their  ends. 

I  looked  over  my  problem,  made  some  calculations  and 
decided  the  solution  of  the  whole  problem  was  to  double  the 
capacity  of  the  press-room.  On  reporting  to  Mr.  Chalmers 
that  I  would  do  that  to  get  the  result  a  look  of  anguish  came 
over  his  face  as  he  quietly  said:  "We  have  a  quarter  of  a 
million  tied  up  in  that  press-room  equipment  now.  I  don't 
know  what  the  stockholders  will  say." 

I  said:     "I  am  going  to  double  the  capacity  of  the  press 

room  without  spending  a  dollar."     He  asked  how.     "I  am 

going    to    print    two    colors    instead  of  four  colors 

^"^te   ^   on  the  house-organ.''     "Well,"  said  he,  "I  do  not 

Capaciii/  think  the  president  will  like  that." 

of  the  I  said:  "That  is  something  that  I  will  have  to 
Press  jijg  judge  of.  If  the  president  doesn't  like  it,  I  will 
move  on.  But  I  do  not  want  to  move  on,  and 
I  am  not  making  a  mistake." 

This  was  an  instance  of  the  advertising  manager  taking 
the  scope  and  I  can  say  in  passing,  as  you  may  be  interested, 
that  the  result  was  satisfactory. 

I  think  advertising  men  very  often  unwittingly  shorten  their 
own  scope.  They  circumscribe  their  own  authority.  There 
is  no  doubt  a  great  deal  of  reason  for  submitting,  at  different 
times,  the  advertising  matter  that  they  prepare  to  superiors 


474        ADVERTISING  AS  A  BUSINESS  FORCE 

or  to  co-workers.  But  their  attitude  in  submitting  the  same 
is  an  indifferent  kind  that  causes  a  lack  of  confidence.  They 
submit  their  plan  or  advertisement  with  this  expression: 
"What  do  you  think  of  this?"  Instead  of  saying,  "This  is 
what  we  are  going  to  do." 

If  there  is  a  real  honest  criticism  due  the  advertisement 
or  plan  that  is  submitted,  the  latter  way  of  submitting  it  will 
bring  it  out,  whereas  the  first  query  is  an  invitation  to  pull 
it  to  pieces  and  leave  it  broken  up. 

The  advertising  manager  very  often  has  not  entirely  de- 
veloped his  scope.  I  know  of  a  case  in  Chicago  where  a  head 
of  the  concern  had  done  his  own  advertising  until  his  business 
got  to  such  proportions  that  he  felt  that  he  could  profitably 
leave  that  work  to  another  and  go  on  to  more  important  things. 
I  was  in  his  confidence,  and  when  he  hired  the  young  man 
to  take  up  the  work  of  advertising  he  a^ked  me  to  see  him 
as  often  as  I  could  and  to  submit  to  him  any  ideas  or  suggestions 
that  would  be  for  the  firm's  good. 

Six  months  rolled  by.     The  business  that  I  got  out  of  that 

house  fell  off  to  such  an  extent  that  I  thought  that  another 

engraver  must  be  closer  to  the  advertising  manager 

The  Need  \\^Q;n  I  was.     I  took  the  matter  up  with  the  boss. 

Initiative    ^^^  ^^  said,  "No,  you  are  getting  all  our  engraving. 

Nobody  else  can  get  any  of  it  and,"  he  said,  "strange 

as  it  may  seem,  I  am  sorry  that  we  are  not  spending  more  money 

with  you  but  the  fact  of  the  matter  is  that  advertising  man 

of  mine  doesn't  get  anything  done.     He  hasn't  ideas  of  his 

own;  at  least,  so  far  as  I  can  see,  and  when  I  or  my  partner 

give  something  to  him  to  do  he  asks  for  time  to  improve  upon 

our  idea  and  in  six  months  we  have  not  spent  one  third  of 

the  money  we  should  have  liked  to  have  spent  in  advertising. 

Another  story  of  an  advertising  manager  who  ordered  a  cover 
for  a  catalogue:  I  submitted  the  rough  sketch,  he  looked 
at  it  and  said:  "Let  me  show  this  to  the  boss.  I  want  to 
see  what  he  thinks  of  it."  I  waited  outside  the  private  office 
and  what  came  out  of  that  private  office  was  language  that  is 
certainly  not  fit  to  repeat  here  this  evening.  The  boss  told 
that  advertising  man,  using  language  that  was  more  lurid 
than  elegant,  that  he  certainly  ought  to  have  sense  enough 
to  O.  K.  a  cover  sketch  without  bothering  him,  etc.,  etc.  I 
felt  embarrassed  overhearing  the  call  down  of  the  advertising 
manager  and  moved  as  far  away  from  the  front  office  as  I 


THE  ADVERTISING  MANAGER  475 

could,  so  that  when  the  young  man  came  out  he  might  feel 
at  ease. 

Imagine  my  surprise  when  the  gentleman  smiled  and  said: 
"Mr.  F.  has  left  this  entirely  to  me.  I  am  to  use  my  own 
judgment.     This  is  O.  K." 

THE   TRAINING   OF   THE   ADVERTISING  MANAGER 

With  this  enlarged  scope  of  the  advertising  manager's 
activity,  the  question  naturally  arises,  Where  is  the  man  to  be 
found  who  can  meet  these  requirements?  If  the  advertising 
manager  is  to  be  called  on  to  perform  these  exacting  functions, 
it  is  evident  that  the  time  has  passed  when  successful  adver- 
tising men  can  be  developed  without  very  careful  and  intel- 
ligent preliminary  training. 

Truman  A.  DeWeese,  director  of  publicity  of  the  Shredded 
Wheat  Company,  discusses,  as  follows,  his  idea  of  what  an 
advertising  manager  should  be,  and  suggests  the  general  form 
which  he  believes  his  preparation  should  take:  Mr.  DeWeese 
does  not,  however,  give  more  than  a  general  statement  of  his 
ideas  on  training: 

*I  am  asked  to  give  an  expression  of  opinion  as  to  what 
should  be  the  training,  quahfications,  and  functions  of  an  ad- 
vertising manager. 

Dviies  There  is,  no  doubt,  a  wide  diversity  of  opinion 
Training  ^^  ^^  what  should  be  the  duties  and  prerogatives 
of  an  advertising  manager.  But  as  I  am  asked  for 
my  opinion  only,  I  intend  to  embody  my  opinion  only  in  this 
article.  It  is  obvious  that  the  duties  and  prerogatives  of  the 
position  must  vary  according  to  the  job  and  the  peculiar  con- 
ditions that  are  thrown  around  it  by  the  commodity  to  be 
advertised  and  the  sales  organization  which  has  charge  of 
its  distribution. 

Advertising  an  adding  machine  or  a  typewriter  that  is  sold 
to  special  customers  in  business  offices  is  quite  a  different 
matter  from  advertising  a  food  product  for  world-wide  con- 
sumption.    The   functions   of   the   advertising   manager  will 

*Pnnters'  Ink,  Jyjy  14,  1910,  p.  141. 


476        ADVERTISING  AS  A  BUSINESS  FORCE 

also  vary  according  to  his  connection  with  the  company  which 
employs  him  and  also  according  to  the  kind  of  advertising  that 
is  required  to  market  the  commodity  advertised.  If  the  com- 
modity is  one  which,  like  Shredded  Wheat,  calls  for  a  vast 
amount  of  educational  work  which  he  has  trained  liimself 
to  do  by  long  association  with  the  product,  much  of  the  detail 
which  is  necessary  to  make  that  advertising  effective  must 
be  handled  by  the  advertising  agency  which  places  the  adver- 
tising. 

If  the  advertising  of  the  product,  however,  is  merely  a 
question  of  poster  effect  or  the  constant  display  of  the  company's 
trade-mark,  the  duties  of  the  advertising  manager  will  obviously 
consist  of  the  mere  management  of  details,  selection  of  media 
and  co-operation  with  the  sales  organization  and  the  placing 
agency. 

In  a  general  way,  however,  my  opinion  as  to  what  an  adver- 
tising manager  should  be  and  what  he  should  do  may  be  sum- 
marized as  follows : 

First,  the  advertising  manager  should  exercise  great  care 
in  choosing  an  employer.     If  he  is  a  man  of  experience  and 

„,      .      national    reputation   he    need   not    go    begging    for 

Q*        a  job,  for  advertising  men  who  are  big  enough  to 

Employer  handle  national  propositions  are  very  scarce.     It  is 

not  beyond  the  bounds  of  truth  to  say  that  he  can 

almost  choose  his  own  employer.      The  country  is  "blessed" 

with  a  bumper  crop  of  "ad  men";  but  real  advertising  men 

who   have  demonstrated    their   ability  to  sell  goods  through 

advertising  are  not  so  numerous. 

We  are  in  an  age  of  wonderful  industrial  activity  when  new 
manufacturing  enterprises  are  springing  up  on  every  hand,  all 
of  which  are  calling  for  the  genius  of  the  man  who  can  make 
a  world-wide  market  for  a  commodity  through  national  adver- 
tising. An  advertising  manager  should,  therefore,  be  careful 
to  pick  an  employer  who  understands  the  value  of  advertising 
and  who  is  willing  to  pay  a  salary  commensurate  with  that 
understanding. 

Unfortunately,  many  national  advertisers  are  big  corporations 
where  authority  is  not  concentrated.  Advertising  is  too  big 
a  problem  for  the  average  business  man  on  the  average  board 
of  directors.  The  advertising  manager  should,  therefore, 
pick  an  employer  who  is  willing  to  give  him  absolute  and  unquali- 
fied authority  over  the  advertising,  and  in  order  to  carry  this 


THE  ADVERTISING  MANAGER  477 

out  in  good  faith  he  should  have  one  man  or  one  committee  to 
confer  with.  In  no  department  of  business  management  has 
the  one-man-power  idea  so  great  an  advantage  as  in  the  adver- 
tising department.  Too  many  advertising  managers  are  mere 
rubber-stamp  clerks,  charged  with  the  duty  of  sending  out 
cuts  and  electrotype  matter.  The  advertising  manager  should 
be  the  manager  in  fact  as  well  as  in  name.  All  correspondence 
and  matters  pertaining  to  advertising  should  come  to  his  desk. 

Second,  having  selected  his  employer,  the  advertising  man- 
ager should  constantly  look  after  the  education  of  that  employer 
with  assiduous  diligence  and  care.  Members  of  big  corpora- 
tions which  do  a  national  business  are  busy  men.  As  a  rule, 
they  are  glad  to  learn  all  they  possibly  can  about  advertising. 
Their  minds  are  receptive  and  it  would  be  well  to  put  into  their 
hands  the  best  literature  dealing  with  practical  problems 
in  advertising.  This  kind  of  co-operation,  combined  with 
results,  will  bring  about  a  relation  that  is  not  only  pleasant 
but  is  very  apt  to  be  permanent  and  profitable. 

Third,  having  selected  a  good  employer,  the  advertising 
manager  should  receive  a  salary  on  the  basis  of  the  yearly 
advertising  appropriation  to  be  expended.  Nothing  less  than 
an  annual  salary  of  five  thousand  dollars  should  be  considered 
for  a  moment,  and  to  this  salary  one  thousand  dollars  should 
be  added  for  every  ten  thousand  dollars  of  appropriation  above 
the  sum  of  one  hundred  thousand  dollars.  If  the  management 
of  the  department  which  creates  a  market  for  a  commodity 
and  which  increases  sales  from  year  to  year  is  not  worth  this 
salary,  it  isn't  worth  anything,  and  the  advertising  manager 
should  give  his  services  to  a  corporation  which  understand 
the  value  of  advertising. 

Fourth,   the   advertising  manager  should   make  a  careful 

and  conscientious  study  of  the  product  he  is  going  to  advertise 

and  should  master  all  the  "selling  arguments"  that 

What  the  He  behind  it.      He  should  have  no  other  interests 

Advertising  q£  ^j^y  character.     He  should  not  be  interested  in  the 

Should     "advertising    business"    or    in    any    publication    or 

Study  medium.  If  he  is  employed  by  the  Shredded  Wheat 
Company  he  should  be  a  "Shredded  Wheat  man"; 
if  by  the  Eastman  Kodak  Company  he  should  be  a  "Kodak 
man."  He  ought  to  know  his  own  advertising  proposition 
above  all  others,  even  though  he  may  claim  a  general  knowledge 
of  advertising. 


478         ADVERTISING  AS  A  BUSINESS  FORCE 

Fifth,  the  relation  between  the  advertising  manager  and 
the  sales  organization  should  be  one  of  complete,  confiden- 
tial co-operation.  The  advertising  manager  should  evolve, 
originate  and  formulate  the  selling  arguments  that  are  to  be 
used  by  the  sales  organization  from  year  to  year  and  which 
may  change  with  the  development  of  the  business  and  the 
trade  conditions  that  govern  its  sale.  If  the  advertising  depart- 
ment is  what  it  should  be  the  salesmen  will  be  merely  distrib- 
utors. It  is  their  job  to  keep  in  touch  with  the  trade.  They 
don't  need  to  sell  goods.     The  goods  are  already  sold. 

Sixth,  the  advertising  manager  should  select  the  agency 
which  is  to  place  the  advertising,  and  the  selection  of  that 
agency  should  be  governed  by  a  knowledge  of  its  ability  to  give 
him  individual  service  and  thus  make  his  advertising  effective. 
No  other  considerations  should  have  any  weight  in  the  matter. 
If  the  employing  corporation  hasn't  enough  confidence  in  his 
honesty  or  his  ability  to  leave  this  matter  entirely  to  him,  it 
would  be  wise  for  him  to  make  some  other  advertising  con- 
nection. He  is  not  in  the  right  place  for  satisfactory  growth 
or  development.  He  should  select  an  agency  that  handles 
no  competing  product  and  then  he  should  stand  by  the  agency. 
It  is  through  sympathetic  co-operation  between  the  agency  and 
the  advertising  manager  that  advertising  is  made  effective. 
Make  the  agency  work  for  you,  not  for  the  publishers.  It  is 
of  no  consequence  to  you  whether  the  publisher  pays  the  agency 
a  commission  or  not.  If  you  handle  your  business  properly 
you  can  make  the  agency  your  agent.  If  a  publisher  confidently 
offers  to  give  you  the  agency  commission  and  just  as  low  a  rate 
as  the  agency  will  give,  shun  him  and  keep  his  publication  off 
the  list.  If  he  deals  unfairly  with  the  agency,  he  will  deal 
unfairly  with  you.  The  agencies  have  developed  national 
advertising.  You  can't  wipe  them  off  the  map  with  any  resolu- 
tions or  advertising  associations.  They  are  here  to  stay. 
The  wise  advertiser  and  the  wise  advertising  manager  will 
use  them  and  their  accumulated  experience  and  facilities  in 
combination  with  his  own  experience  and  ability  for  making 
the  advertising  effective  and  far-reaching. 

Seventh,  whether  the  advertising  manager  should  write 
his  own  copy  or  originate  his  own  designs  for  the  various  kinds 
of  advertising  which  he  is  going  to  employ  depends  on  the 
nature  of  the  commodity  which  he  is  advertising.  In  many 
instances  where  the  product  calls  for  a  peculiar  kind  of  edu- 


THE  ADVERTISING  MANAGER  479 

cational  advertising  the  advertising  manager  can  sometimes 

write  better  copy  and  originate  more  effective  designs   than 

the  advertising  agency,  because  of  his  long  acquain- 

Adpishng  tance  with  the  product  and  because  he  is  in  the  at- 

3/Ia/ir^  ^^osphere   of  the  factory   and  in  closer  touch  with 

to  Ends    the  sales  organization.     In  many  other  instances  the 

agency  can  get  out  better  copy  and  originate  better 

advertising  ideas  than  he  can  because  it  has  made  a  greater 

study  of  the  art  of  impressing  the  human  mind  with  the  desire 

to  possess  salable  commodities. 

Eighth,  the  advertising  manager  should  know  the  special 
adaptability  of  newspapers,  magazines,  and  other  mediums 
to  his  particular  product.  He  should  know  enough  to  use 
magazines  for  national  publicity  and  newspapers  for  localizing 
that  publicity,  bringing  the  consumer  up  to  the  door  of  the 
dealer.  The  advertising  manager  is  the  only  man  in  the 
advertising  business  who  is  in  a  position  to  take  a  rational 
view  of  advertising.  He  is  not  selling  space  or  circulation. 
The  publisher's  representative  will  talk  circulation  as  though 
it  were  a  tangible  commodity.  The  man  who  is  advertising 
a  product  and  spending  money  for  a  corporation  knows  that 
he  is  paying  for  the  opportunity  to  attract  the  attention  of 
the  readers  away  from  editorial  and  news  matter.  He  is  simply 
buying  a  chance.  The  publisher  can  guarantee  that  his 
publication  has  a  certain  circulation, .but  he  cannot  guarantee 
that  your  advertisement  will  be  read.  Whether  it  will  be  read 
or  not  is  largely  up  to  you,  and  even  then  the  "make-up  man" 
may  put  your  ad  where  nobody  can  see  it.  The  advertising 
manager  should  make  a  study  of  all  mediums.  He  should 
study  their  editorial  character  and  learn  if  possible  the  kind 
of  people  who  read  the  different  publications.  There  is  no 
other  way  in  which  he  can  judge  of  their  value  as  distributing 
mediums  for  his  particular  product.  You  cannot  always 
depend  upon  solicitors  or  representatives  for  this  information. 
Many  of  them  do  not  possess  this  information. 

Ninth,  having  determined  upon  a  definite  plan  or  policy, 
the  advertising  manager  should  stick  to  it.  "Keeping  ever- 
lastingly at  it"  is  the  secret  of  successful  advertising.  Adopt 
a  schedule  to  fit  the  appropriation.  It  is  unnecessary  to  say 
that  this  schedule  should  be  based  upon  your  selling  plans  and 
trade  conditions  that  affect  the  sale  of  your  product,  and 
should  not  be  arranged  with  reference  to  passing  the  appropria- 


480        ADVERTISING  AS  A  BUSINESS  FORCE 

tlon  around  among  a  given  group  of  publications.  The  man 
who  will  allow  a  game  of  golf,  a  theatre  ticket,  or  a  dinner  at 
the  Waldorf-Astoria  to  influence  him  in  such  matters  is  a  poor, 
weak,  despicable  creature  who  will  get  the  contempt  of  the 
publishers  themselves  and  will  not  last  long  in  the  advertising 
business.  The  advertising  manager  should  have  enough 
character  and  stamina  to  pick  his  own  mediums  and  run  his 
own  business,  even  though  he  may  yield  to  the  pleasures  and 
beguilements  of  good  fellowship. 

Tenth,  the  advertising  manager,  whenever  it  is  possible  to 
do  so,  should  be  a  stockholder  in  the  concern  which  employs 
him  and  should  occasionally  sit  in  the  councils  of  the  executive 
board.  Inviting  him  to  sit  with  the  executive  board  is  not 
only  an  expression  of  confidence  in  his  judgment  but  is  a  recog- 
nition of  the  importance  of  advertising  and  its  close  relation 
to  salesmanship.  If  he  is  a  stockholder  he  will  be  spending 
his  own  money  for  advertising,  and  every  scheme  he  adopts 
to  enlarge  the  market  for  the  product  will  redound  to  his  own 
financial  advantage  and  at  the  same  time  give  him  prestige 
and  standing  which  insures  his  position  in  the  advertising 
world.  If  he  cannot  own  any  stock  he  should  be  the  accredited 
representative  of  some  big  stockholder.  He  should  be  master 
of  his  own  job.  He  should  be  so  thoroughly  familiar  with  the 
publications  of  the  country  and  should  have  such  a  thorough 
knowledge  of  advertising  that  all  matters  pertaining  to  adver- 
tising should  be  very  promptly  and  willingly  referred  to  him 
by  members  of  the  corporation  which  he  represents. 

The  advertising  manager  should  not  claim  too  much  for 
advertising.  He  should,  however,  have  a  sufiiciently  compre- 
hensive knowledge  of  the  business  in  which  he  is 
Advertising  engaged  to  know  just  what  measure  of  success  is 

Sales  d^^^  ^^  advertising,  and  he  should  know  as  nearly  as 
it  is  possible  to  ascertain  just  what  relation  the 
advertising  bears  to  the  annual  sales  of  the  product.  If  he  is 
handling  a  large  appropriation  he  will  be  bombarded  by  many 
telegrams,  special  delivery  letters  from  special  agents,  and 
by  callers  who  will  tell  him  that  "they  came  all  the  way  from 
New  York  just  to  see  him."  If  he  is  a  man  of  the  right  char- 
acter and  stamina,  however,  such  things  will  not  disturb  his 
tranciuillity.  He  should  be  a  man  of  amiable  equipoise  and 
never  failing  affability.  If  he  has  the  right  stuff  in  him  he 
will  allow  none  of  these  stampeding  methods  to  interfere  with 


THE  ADVERTISING  MANAGER  481 

the  arrangement  of  his  advertising  schedules  and  plans.  In 
buying  space  and  selecting  mediums  he  will  be  governed  only 
by  trade  conditions,  by  past  experience,  and  a  knowledge  of 
the  possible  consumer  to  whom  he  must  make  his  appeal. 

Eleventh,  the  advertising  manager  should  have  some  knowl- 
edge of  printing  and  lithography.  If  he  has  been  a  printer 
some  time  in  his  life,  so  much  the  better.  A  knowledge  of 
the  mechanical  technique  of  these  arts  will  be  of  great  advantage 
to  him  in  the  preparation  of  booklets,  leaflets,  folders  and  other 
advertising  literature,  which  come  under  the  direction  of  most 
advertising  managers.  When  it  comes  to  advertising  com- 
modities that  have  a  world-wide  market  the  advertising  in 
the  magazines,  newspapers,  and  other  media  is  only  one  feature 
of  the  work  that  falls  to  the  department. 

The  advertising  manager  should  not  be  a  desk  man.  He 
should  have  a  desk,  but  he  should  not  keep  his  nose  on  it  for 
any  fixed  number  of  hours.  My  best  advertising  "copy" 
is  written  on  the  train,  at  home,  on  a  boat,  or  in  church.  .  . 
All  of  which  means  that  an  office  is  not  the  best  place  in  which 
to  write  good  "copy"  or  to  originate  advertising  ideas.  The 
wise  advertising  manager  leaves  much  of  the  letter-writing, 
and  much  of  the  details  of  his  department,  to  a  detail  man  who 
has  a  mind  for  details  and  who  will  relieve  him  of  the  work 
that  tends  to  destroy  the  creative  faculty  which  gives  dynamic 
force  and  vitality  to  advertising. 

TRAINING    FOR    ADVERTISING    MANAGERS 

No  better  idea  can  be  gotten  of  the  kind  of  training  which 
can  fit  a  man  for  the  position  of  advertising  manager  than  to 
study  the  processes  by  which  some  of  the  more  successful  men 
in  this  line  of  work  havebeen  drawn  into  the  business.  This, 
of  course,  does  not  show  what  kind  of  training  is  really  best,  but 
it  does  give  a  good  idea  of  how  some  of  the  best  men  in  the 
business  learned  to  see  what  their  work  was,  and  to  adapt 
themselves  to  it. 

*When  you  inquire  into  the  earlier  experiences  of  many 
men   who    are   to-day  occupying   important  positions  in  ad- 

*Printcr's  Ink,  August  18,  1910,  p.  47. 


482        ADVERTISING  AS  A  BUSINESS  FORCE 

vertising,  you  find  that  the  majority  of  them  "grew"  into  the 
business. 

Not  all  of  them  like  Topsy,  to  be  sure,  but,  nevertheless, 
they  were  often  dragged  in  by  the  heels  unexpectedly,  or 
suddenly  found  themselves  in,  without  knowing  really  when 
they  started  to  go  there.  Some  co-related  fields,  like  the  news- 
paper, printing,  the  sales-force,  trade  journalism,  and  other 
things  placed  them  in  the  path  of  the  phenomenally  growing 
business  of  advertising  and  there  they  were ! 

As  a  result  of  this  peculiar  condition,  many  advertising 
men  of  to-day  have  an  interesting  "past."  In  fact,  taken 
in  a  lump,  the  advertising  profession  represents  a  greater  variety 
of  business  experience  and  points  of  view  in  the  training  and 
past  work  of  its  devotees  than  possibly  those  of  which  any 
other  business  can  boast. 

Take,  for  example,  Herbert  G.  Ashbroke,  advertising  man- 
ager of  "Jap-a-lac."  From  the  time  he  was  twenty  until  he 
was  twenty-five  he  was  employed  in  a  wholesale  drug  house 
in  Indianapolis  —  could  you  imagine  anything  further  removed 
from  advertising?  He  left  that  to  take  up  fire  insurance  for 
the  next  four  years;  and  if  you  can  see  any  advertising  training 
in  that  your  eyes  must  be  supernaturally  good.  But  he  met 
F.  A.  Glidden,  and  joined  him  in  1899  as  a  salesman  on  the  road. 
After  a  time  Mr.  Ashbroke  was  struck  with  the  possibilities 
of  Jap-a-lac,  though,  according  to  his  own  confession,  "I  knew 
nothing  of  advertising  at  the  time."  Yet  he  asked  to  be  placed 
in  charge  of  advertising,  and  learned  by  making  many  mistakes. 
"I  have  often  thought,"  says  he,  "how  foolish  some  of  my 
statements  about  advertising  must  have  sounded  to  adver- 
tising men  who  were  soliciting  our  business  and  some  of  whom 
have  spent  their  lives  in  a  study  of  advertising.  But  I  was 
determined  to  learn,  and  availed  myself  of  every  opportunity 
to  talk  with  advertising  men  and  to  read  a  great  deal  that  has 
been  written  on  what,  to  my  mind,  is  the  most  interesting 
subject  in  the  world." 

O.  C.  Harn,  advertising  manager  of  the  National  Lead 
Company,  was  once  a  reporter  on  a  Cleveland  paper  —  then 
he  became  editor  of  an  architectural  journal,  and,  later  on, 
became  one  of  the  proprietors  and  editors  of  a  grocery  trade 
paper. 

It  was  in  this  connection  that  he  became  interested  in  adver- 
tising,   through   writing   the   advertisements   for   patrons    of 


THE  ADVERTISING  MANAGER  483 

the  publication  and  helping  in  the  planning  of  their  campaigns, 
finally  throwing  himself  into  the  thick  of  the  thing  by  going 
with  one  of  his  clients,  the  H.  J.  Heinz  Company,  until  he  was 
called  to  take  charge  of  the  advertising  of  the  National  Lead 
Company. 

The  experiences  of  a  great  many  other  advertising  men  would 
be  found  to  be  very  similar  to  Mr.  Harn's. 

They  found  an  opportunity  to  help  in  the  advertising  of 
some  advertiser,  showed  their  adaptability  for  the  work,  then 
advanced  step  by  step  to  a  good  position. 

A  number  of  advertising  men  have  secured  their  start  by 
inducing  some  local  merchant  to  let  them  prepare  his  adver- 
tising copy.  This  gave  them  a  chance  to  show  whatever 
ability  they  had  in  this  line  and  it  was  rapidly  developed,  until 
a  better  opening  was  secured. 

Truman  A.  DeWeese,  director  of  publicity  for  the  Shredded 

Wheat  Company,  was  a  newspaper  editorial  man  originally. 

He  went  from  a  paper  in  Michigan  to  the  Chicago 

Another    Record-Herald,  and   then   got   mixed   up   in   editing 

^^^'^^''  "What  to  Eat,"  now  National  Food  Magazine. 
It  was  a  rather  simple  step  to  get  acquainted  in 
this  capacity  with  the  Shredded  Wheat  folks,  and  he  took 
up  their  advertising. 

The  two  greatest  sources  from  which  advertising  men  are 
drawn  are  the  newspaper  and  the  sales  force.  The  newspaper 
seems  to  have  a  peculiar  fitness  in  developing  versatility  and 
terse,  graphic  writing,  important  qualities  in  advertising. 
The  sales  force,  in  turn,  is  developing  the  newer  type  of  advertis- 
ing man,  who  is  not  only  a  writer,  but  a  practical  selling  man, who 
can  combine  copy- writing  with  analysis  of  concrete  selling  con- 
ditions. The  combined  advertising  and  sales  manager  is  grow- 
ing out  of  this  tendency  to  put  a  sales-trained  man  to  the  work. 

R.  A.  Holmes,  advertising  and  sales  manager  of  the  Crofut- 
Knapp  Company  ("Knapp  Felt"  Hats),  entered  advertising 
through  the  sales  department,  and  is  a  prominent  example 
of  the  sales  and  advertising  manager  combined. 

F.  X.  Cleary,  advertising  manager  of  the  Western  Electric 
Company,  also  graduated  from  the  Company's  selling  force 
into  the  advertising  department. 

Herbert  Proudfit,  recently  made  advertising  manager  of 
the  /^olian  Company,  was  on  the  selling  staff  of  the  company 
originally,  and  later  assistant  advertising  manager. 


484        ADVERTISING  AS  A  BUSINESS  FORCE 

S.  C.  Dobbs,  advertising  manager  of  Coca-Cola,  was  on  the 
road  as  an  ordinary  salesman  for  some  time.  Then  he  was 
made  sales  manager,  and  later  also  advertising  manager. 

At  the  same  time,  there  are  some  who  have  lapped  into 
advertising  and  sales  departments  by  the  same  old  newspaper 
route.  Roy  B.  Simpson,  who  is  just  retiring  as  sales  and 
advertising  manager  of  the  Keller-Santo-Vacuum  Cleaner 
Company,  Philadelphia,  entered  advertising  from  the  news- 
paper and  printing  end.  He  was  a  practical  printer  in  Arkansas 
at  seventeen  or  eighteen,  and  soon  after  became  a  mailing  clerk 
with  the  Fort  Worth  Gazette,  and  at  twenty  years  of  age  circu- 
lation manager.  At  twenty-three  he  was  working  on  a  farm 
paper,  and  at  a  feed  experiment  station  got  acquainted  with 
grain  feed  advertisers.  Later  he  became  assistant  advertising 
manager  of  the  Quaker  Oats  Company. 

This  illustrates  the  frequency  with  which  men  are  drawn 

into  advertising,  ten  and  twenty  years  ago,  simply  through 

propinquity  and    allied   activities.      Another  promi- 

of  p''^^'^^  inent  advertising  man's  start  was  like  this:  he  was 

pinquitu  ^^^^  ^  printer's  devil,  then,  being  ambitious  to  write, 
started  a  column  of  observations  for  the  newspaper 
in  whose  composing-room  he  was  working.  These  writings 
attracted  a  rival  newspaper's  attention  and  he  was  offered 
an  editorial  position.  One  day  a  real-estate  advertiser  asked 
for  his  assistance  in  preparing  advertising  (not  knowing  where 
else  to  go)  and  the  young  man,  then  but  twenty-one,  found 
he  liked  the  work  and  did  more  of  it,  finally  getting  a  number  of 
clients  and  started  an  agency,  which  grew  into  general  adver- 
tising and  brought  him  to  the  attention  of  prominent  agents 
and  advertisers. 

Many  solicitors  for  agencies,  special  agents,  and  publisliers' 
representatives  (who  represent,  usually,  a  rather  separate 
division  and  type  of  training)  are  very  frequently  drawn  from 
newspaper  and  trade-paper  soliciting  staffs,  though  a  large 
number  are  now  trained  directly  on  the  staff  by  older  men 
in  the  field.  There  are  now  so  many  ambitious  college  men 
who  are  eager  to  get  experience  in  advertising  solicitation  that 
openings  are  very  quickly  filled,  and  there  are  even  waiting  lists. 

An  unusual  instance  of  a  solicitor  and  circulation  manager 
becoming  an  agency  copy  man  and  advertising  manager  is 
afforded  in  the  case  of  C.  C.  Winningham,  who  recently  left 
Lord  &  Thomas  as  head  of  the  copy  department,  to  become 


THE  ADVERTISING  MANAGER  485 

advertising  manager  of  the  Hudson  Motor  Company.  Mr. 
Winningham  was  a  big  success  as  circulation  and  business 
manager  of  the  Muncie  Star  and  later  with  the  Star  League 
of  newspapers. 

As  a  matter  of  fact,  no  business  experience  is  without  value 
to  one  in  the  advertising  business.  The  closer  he  has  been  to 
selling  conditions,  the  better  advertising  manager  he  makes. 
It  is  a  mistake  to  assume  that  writing  ability  and  a  knowledge 
of  type  are  an  adman's  requirements. 

George  P.  Metzger,  advertising  manager  of  the  Columbia 
Phonograph  Company,  has  been  everything  from  office  boy 
to  typewriter  salesman  and  rubber  tire  representative,  to  say 
nothing  of  running  a  bicycle  repair  shop!  He  drifted  into 
agency  work  after  some  breezy  advertising  work  for  a  large 
concern,  and  was  chief  copy  man  in  the  Hampton  Advertising 
Agency,  mainly  because  of  a  fertility  of  ideas  that  were  practical. 

Others  have  gotten  into  advertising  most  unexpectedly. 
One  of  the  ablest  women  in  the  advertising  field  was  a  news- 
paper writer  and  later  a  stenographer.  In  one  position  she 
was  given  advertising  work  to  do  because  nobody  else  seemed 
to  consider  it  above  a  stenographer's  calibre,  and  her  work 
attracted  the  attention  of  an  agency,  for  which  she  later  did 
some  very  important  work. 

In  a  number  of  cases  advertising  men  on  the  copy  staff  of 

agencies    have    been    chosen    as    advertising    managers.     An 

interesting    example,    is    that    of    W.   W.   Wheeler, 

From  the  advertising    manager    of    the    Pompeian    Massage 

Com/^  Cream  Company.  He  was  originally  a  newspaper 
Staff  man  who,  when  he  struck  a  hard  time  to  make  con- 
nections, was  taken  on  the  Hampton  Advertising 
Agency  staff.  As  he  was  a  learner,  he  had  no  easy  time  of  it, 
and  finally  connected  with  the  George  Batten  Agency,  from 
where  he  was  called  to  become  Pompeian's  advertising  manager. 

Ellis  Howland,  advertising  manager  of  the  Kellogg  Toasted 
Corn  Flake  Company,  was  doing  trade  reporting  for  the 
New  York  Journal  of  Commerce  before  being  asked  to  join  the 
Kellogg  forces.  Harry  Ford,  advertising  manager  of  the 
Chalmers-Detroit  Company,  was  also  a  forceful  writer  for 
for  newspapers,  etc.,  before  his  advertising  experience  with 
the  National  Cash  Register  Company  and  Chalmers. 

Marquis  Regan,  until  lately  advertising  manager  of  Yawman 
&  Erbe,  worked  on  Kansas  City  and  Iowa  publications  in 


486        ADVERTISING  AS  A  BUSINESS  FORCE 

various  capacities,  and  developed  some  original  ideas  of  adver- 
tising classification.  Agency  work  was  his  stepping-stone 
to  an  advertising  managership. 

But  if  many  now  prominent  "evolved"  into  the  business 
others  shouldered  their  way  into  it.  The  story  is  told  how 
E.  St.  Elmo  Lewis,  advertising  manager  of  the  Burroughs 
Adding  Machine  Company,  offered  to  work  under  the  title 
of  stenographer,  since  the  advertising  was  not  then  considered 
enough  to  engage  a  man's  time. 

It  has  been  growing  increasingly  hard  to  secure  a  start  in 
the  business,  due  to  the  large  number  of  those  whom  the  busi- 
ness is  attracting.  A  great  many  raw  and  extremely  poorly 
equipped  young  men  (as  well  as  women)  have  been  attracted 
in  various  ways,  frequently  by  the  representations  of  irrespon- 
sible schools  and  classes  of  advertising.  Many  of  these  have 
an  erroneous  idea  that  they  can  get  their  training  in  advertising 
agencies.  As  a  matter  of  fact,  it  is  constantly  becoming  harder 
to  secure  an  opening  for  learners  in  agencies,  and  the  best 
agencies  have  for  some  years  now  refused  to  employ  any  but 
experienced  men. 

General  advertising  is  rarely  the  right  place  for  a  beginner 
to  start.  He  needs  retail  advertising  experience,  and  also 
business  experience.  It  is  practically  hopeless  for  a  school 
teacher,  for  instance,  or  any  one  without  business  experience 
to  undertake  advertising. 

A  well-known  advertising  man  is  advising  all  who  ask  him 
how  to  "get  a  foothold"  in  the  business  to  go  behind  a  retail 
counter  and  learn  to  talk  advertising  first,  or  go  out  and  sell 
books  or  anything.  Then  write  circulars  and  learn  how  to 
handle  words. 

One  or  two  correspondence  schools  are  very  helpful  in  provid- 
ing technical  groundwork,  but  a  certain  temperament  is  needed 
to  be  successful  in  advertising  —  a  versatile,  alert,  and  naturally 
adaptive  temperament,  and  a  businesslike  tendency  of  mind. 
Without  this,  failure  is  very  certain. 

Some  rather  pitiful,  yet  determined,  efforts  are  made  to  get 
into  agencies.  One  college  graduate,  a  plucky  son  of  wealthy 
parents,  actually  agreed  to  work  as  mail  boy  in  order  to  get 
inside  the  coveted  portals  of  a  famous  agency,  which  had  no 
use  for  beginners.  Of  course,  this  was  a  mistake,  for  the  poor 
boy  couldn't  learn  much  more  than  if  he  had  looked  in  at  the 
windows. 


THE  ADVERTISING  MANAGER  487 

Any  young  man  who  has  it  in  him  to  make  a  success  of 
advertising  work  will  "find  a  way"  to  get  into  the  business. 
This  very  ability  to  "find  a  way"  to  accomplish  things  that 
are  desired  is  one  of  the  chief  characteristics  of  a  successful 
advertising  man. 

One  man  who  is  now  in  charge  of  the  advertising  of  one  of 
the  largest  corporations  formerly  held  a  very  good  position 
with  a  large  contracting  firm.  He  decided  he  wanted  to  go 
into  the  advertising  business  and  quit  his  job  in  order  to  take 
a  beginner's  salary  in  a  small  advertising  agency.  He  had  the 
spirit  and  determination  that  win  out.  Another  young  man 
learned  stenography  in  order  to  secure  a  position  as  stenographer 
in  an  agency.  Conditions  in  the  advertising  business  are  not 
the  same  to-day  that  they  were  a  few  years  ago. 

Advertisers  do  not  care  to  risk  their  advertising  problems 
in  the  hands  of  men  who  are  not  thoroughly  experienced,  where 
not  so  long  ago  it  quite  often  happened  that  the  advertiser  took 
a  bright  young  man  from  his  sales  staff  and  put  him  in  the 
office  "to  look  after  the  advertising."  Consequently,  beginners 
to-day  have  to  start  very  humbly,  and  take  a  long  road  full  of 
a  very  great  many  things  to  learn. 

James  H.  Collins,  in  his  discussion  of  the  Advertising  of 
the  Future,  has  a  special  section  devoted  to  the  discussion  of 
the  Advertising  Man  of  To-morrow,  in  which  he  indicates 
something  of  the  tendencies  and  general  directions  of  develop- 
ment which  already  have  been  indicated : 

*  To  judge  what  the  advertising  man  of  to-morrow  will  be, 
it  is  well  to  look  around  in  the  world  of  business  generally 
and  note  some  tendencies. 

We  often  hear  it  said  that  this  is  an  age  of  specialists  —  that 
the  man  who  makes  the  big  success  is  the  fellow  who  can  do 
one  thing  and  do  it  well. 

It  is  an  age  of  specialists,  but  that  is  not  a  very  good  definition 
of  a  specialist.  For  the  time  cometh,  and  indeed  now  is,  when 
the  man  who  can  do  one  thing  exceedingly  well  must  also 
make  it  harmonize  with  what  others  do,  and  put  it  on  a  broad, 
human  basis. 


*Pnnters'  Ink,  February  15,  1912,  p.  3. 


488        ADVERTISING  AS  A  BUSINESS  FORCE 

Talk  with  the  executive  who  hires  engineering  graduates. 

He  will  tell  you  that  the  young  engineer  fresh  from  college 

is  a  lad  of    infinite    possibilities    and    also    infinite 

AT^^^       exasperations.     No    matter    how    sound    his    grasp 

flam  ^^  technical  theories  and  practice,  he  usually  has 
Play  to  be  taught  to  control  himself,  to  work  with  others, 
to  manage  wage  earners,  to  see  that  there  is  far  more 
engineering  than  the  studies  he  pursued  at  "Tech."  The 
engineer-executive  is  often  found  in  high  positions  nowadays. 
He  is  always  a  man  who  has  developed  the  broad,  human  side 
of  a  business  so  well  that  many  of  the  technical  things  he  learned 
at  college  have  been  forgotten.  When  he  has  some  complex 
strains  to  figure  he  turns  the  job  over  to  a  chap  who  learned 
that  so  well  that  he  has  never  been  able  to  learn  anything  else. 

Now  the  advertising  man  of  to-day  is  often  a  specialist  in 
this  narrow  sense.  It  is  his  function  to  express  business  by 
the  printed  word.  He  got  his  training  on  the  college  paper, 
or  in  an  advertising  agency,  or  a  publishing  ofiice.  He  centres 
on  writing,  display,  illustration,  paper  sizes,  and  circulation 
figures,  and  succeeds  in  giving  the  business  such  a  striking 
expression  that  the  house  cannot  begin  to  live  up  to  the  expecta- 
tions aroused  in  readers. 

A  great  deal  is  heard  just  now  of  "service"  in  connection 
with  advertising. 

Some  time  ago  two  young  men,  proprietors  of  an  advertising 
agency,  laid  before  a  clothing  manufacturer  a  "service"  adver- 
tising campaign.  The  clothing  manufacturer  lis- 
fh^^?r^  tened  attentively,  but  when  they  had  finished  said : 
Problems  "Gentlemen,  that  is  a  good  advertising  plan. 
But  what  I  want  is  a  clothing  plan.  I  see  that  you 
have  not  followed  events  in  our  trade.  So  many  things  have 
happened  lately  that  I  don't  believe  I  could  tell  you  about 
them  clearly  in  an  all-day  conference.  But  if  you  are  willing 
to  familiarize  yourself  with  our  business  so  that  you  could  draw 
up  a  real  clothing  plan,  I  could  indicate  points  which  you  might 
investigate  for  the  next  month." 

Those  young  agents  bade  him  good-bye  and  faded  away. 
They  went  out  and  never  came  back.  He  had  called  the  turn 
squarely  on  their  "service,"  and  found  they  did  not  really 
want  to  serve.  He  was  not  willing  to  make  his  business  fit 
their  plan,  so  they  dropped  him  with  the  comfortable  reflection: 

"Just  like  a  manufacturer!     Because  he  has  made  clothing 


THE  ADVERTISING  MANAGER  489 

all  his  life,  he  imagines  his  business  is  peculiar  and  cannot  be 
advertised." 

Next  month  that  agency  issued  a  fine  booklet  entitled 
"Service."  It  skilfully  enumerated  the  points  that  a  thor- 
ough service  investigation  ought  to  cover.  And  every  one 
of  those  points  dealt  with  something  that  the  clothing  manu- 
facturer had  assured  them  they  ought  to  investigate  in  his 
line! 

Up  to  now  the  advertising  man  has  often  been  an  outsider 
to  the  world  of  industry.  Either  as  agent  or  advertising 
manager,  he  has  gone  to  the  manufacturer  with  strong  claims 
for  the  value  of  advertising.  He  proposes  to  tell  the  wonderful 
story  of  the  product  and  make  the  brand  synonymous  with 
quality  in  people's  minds.  The  manufacturer  has  listened, 
told  him  to  go  ahead,  proved  the  value  of  advertising,  and 
then  found  that  something  better  than  a  wonder-story  was 
wanted,  and  something  more  direct  than  this  literary  and 
outside  point  of  view. 

And  as  an  outcome  the  advertising  man  of  to-morrow  can  look 

over  the  country  at  this  very  moment  and  see  himself  evolving 

everywhere.      He  will  be  found  in   factory    offices, 

Coming    gales  branches,  and  other  quarters  of  the    world  of 

S //    ^^  manufacturing  and  distribution.     He  is  starting,  not 

School  with  the  college  paper  or  the  solicitor's  dummy, 
but  by  selling  goods  on  the  road,  or  taking  care  of 
the  city  trade,  or  running  a  department  in  the  works.  Some- 
times he  is  an  engineer  graduate.  Again,  he  is  a  grizzled 
salesman.  But  everywhere  he  is  taking  hold  of  advertising 
from  the  advertiser's  end  rather  than  that  of  the  space  seller. 
He  is  centring  all  his  effort  on  one  advertiser's  business. 
He  knows  the  ins  and  outs  of  the  product,  the  difiiculties  of 
trade  distribution.  He  searches  for  strictly  trade  solutions 
to  knotty  little  trade  problems.  He  understands  the  real 
consumer  well  enough  to  get  his  attention  by  points  of  real 
attraction  in  the  goods  instead  of  a  wonder-story.  He  is  part 
of  the  sales  force  and  the  factory  staff,  and  close  to  the  employer 
who  pays  his  salary. 

This  new  advertising  man  has  not  attracted  much  attention 
from  the  old  agency  and  publishing  men.  They  see  him  as 
they  go  around  the  country,  and  very  often  he  is  a  rather 
naive  lad,  anxious  to  learn,  who  makes  one  smile  with  his 
disconnected  questions. 


490        ADVERTISING  AS  A  BUSINESS  FORCE 

"Oh,  well,"  says  the  old  practitioner,  " he'll  be  a  darn  nice 
fellow  when  he  grows  up." 

But  that  new  type  is  growing  up,  and  he  is  presently  going 
to  be  a  stiff  competitor  for  the  other  kind.  He  already  out- 
numbers the  agency  and  space-selling  men  at  least  ten  to  one. 
For  he  is  found  in  hundreds  of  small  factories,  handling  adver- 
tising that  goes  into  nothing  but  trade  and  technical  papers. 
It  is  he  who  has  suddenly  made  the  advertising  club  thrive 
all  over  the  country.  It  is  he  who  earnestly  sits  down  to  discuss 
advertising  fundamentals  and  exchange  data  about  actual 
results  after  carefully  shutting  the  agency  man  and  the  space 
seller  out.  And  he  is  pressing  to-day  for  reforms  in  advertising 
that  should  have  come  ere  this.  The  agency  and  space  men 
always  hoped  those  reforms  would  come.  This  newcomer, 
however,  is  taking  the  field  to  see  that  they  do  come,  because 
the  evils  that  stand  in  their  way  cost  his  boss  a  whole  lot  of 
money. 

Now,  this  new  advertising  man,  the  fellow  of  to-morrow, 
offers  an  interesting  little  problem  in  competition  for  the 
all-around  advertising  man  whose  experience  has  been 
When  He  gained  in  one  of  the  big  centres.  For  as  he  gains 
Grows  Up  experience  himself,  and  grows  up,  he  is  undoubtedly 
going  to  handle  much  of  the  advertising  of  to-morrow 
right  at  the  factory.  The  all-around  advertising  man  will 
object,  "But  how  will  he  get  the  publishers'  commission.'*" 
And  the  answer  to  that  is  probably  that  there  may  not  be  any 
publishers'  commission.  The  latter  represents  something  that 
has  almost  been  outgrown  by  the  present-day  agency. 

There  is  only  one  way  in  which  the  all-around  man  can  meet 
this  newcomer,  and  that  is  by  developing  as  fast  as  he  does. 
This  will  be  done  by  specializing,  probably.  Instead  of  under- 
taking to  handle  the  advertising  for  any  kind  of  business  that 
came  along,  the  all-around  man  will  centre  on  a  few  lines  that 
really  interest  him  and  become  a  real  factor  in  them  by  thor- 
oughly understanding  their  trade  and  technical  conditions. 
It  may  be  foods  or  textiles,  machine  tools  or  structural  materials. 
Whatever  he  selects  he  will  have  to  study  diligently,  be  a  wide 
reader  of  technical  books  and  journals,  attend  the  conventions, 
follow  the  trade  movements  and  fashions,  and  know  all  the 
men  and  concerns. 

The  advertising  man  of  to-morrow  is  going  to  be  an  insider. 
Facts  upon  which  advertising  ought  to  be  based  cannot  be 


THE  ADVERTISING  MANAGER  491 

secured  from  the  outside.     The  outside  copy  man  may  talk 
with  the  factory  superintendent,  view  the  process,  listen  to 
the  purchasing  agent  on  the  subject  of  good  and  bad 
He  Will    materials,  write  down   the   points  of   merit   in   the 
"  Insider"  forthcoming  model,  and  construct  a  series  of  announce- 
ments that  will  be  interesting  and  impressive. 
Yet  that  is   not   the  whole  of   the   story.     It   is  only  the 
high  lights,  and  maybe  they  are  distorted.    The  factory  sup- 
erintendent is  not  a  talker,  and  in  telling  the  copy  men  what 
he  considers  notable  about  the  product  he  may  overlook  precisely 
the  points  of  real  advertising  interest.     The  purchasing  agent 
may  be  able  to  tell  nothing  new  about  materials  —  the  real 
point  is  in  the  sum  of  a  dozen  little  superiorities  of  quality 
and  in  the  way  the  materials  are  put  together  and  the  goods 
inspected.     Processes  may  be  just  like  those  followed  in  every 
competitor's  factory,  yet  the  goods  are  superior  and  are  sold 
year  after  year  because  they  have  little  niceties  of  design  and 
finish.     The  sales-plan  expert  coming  from  the  outside  may 
canvass  the  trade,  tabulate  superficial  figures  about  the  con- 
sumer, and  lay  down  a  striking  scheme  after  a  surface  study. 
But  he  cannot  get  the  close  contact  with  the  business  that 
comes  to  the  inside  man  who  is  part  of  it,  whose  whole  time 
is  spent  with  it,  who  follows  the  trade  gossip,  the  technical 
developments,  the    consumer's    complaints.      The    insider    is 
with  the  factory  men  while  they  experiment  with  new  things, 
and  with  the  boss  and  the  sales  force  when  they  try  them  on 
the  dog  in  a  corner  of  one  city.     Where  the  outsider  kicks 
up  a  lot  of  dust  in  the  copy,  and  emphasizes  wonderful  and 
fearful  points  of  merit,  the  insider  is  a  quiet  specialist  in  the 
true  sense,  following  all  the  little  points  of  enduring  importance. 
Advertising  is  becoming  more  and  more  special  and  technical. 
The  days  when  a  staple  could  be  boomed  by  writing  general 
wonder-stuff  about  it  are  passing.     That  was  all  very 
r^ii^ff^    well  when  only  one  concern  had  had  the  courage 
bu^Modern  ^^  advertise  such  a  staple  so  far,  and  when  adver- 
Conditions  tising  for  it  was  entirely  new  to  the  public.     With 
a  dozen,  or  twenty,  or  fifty  houses  advertising  the 
same  staple,  however,  and  more  coming  into  the  field  all  the 
time,  it  is  obvious  that  copy  must  have  a  more  intimate  appeal, 
and  that  finer  points  in  distribution  must  be  dealt  with.     This 
calls  for  a  specialist  who  knows  conditions  better,  and  who 
can,  at  the  same  time,  make  advertising  fit  the  general  produc- 


492        ADVERTISING  AS  A  BUSINESS  FORCE 

tion  and  distribution  machinery  of  the  house  he  works  for. 
It  calls  for  the  insider. 

The  all-around,  outside  advertising  man  who  wants  to 
grow  with  his  industry  will  first  select  the  special  lines  he 
wants  to  work  in.  Then  he  will  study  them  technically. 
It  is  astonishing  that  he  has  thus  far  read  so  little  along  technical 
lines.  The  trade  press  and  the  technical  libraries  are  open 
to  him,  however,  and  the  technical  men  he  can  meet  everywhere 
will  yield  information  as  fast  as  he  is  able  to  understand  and  use 
it.  There  are  technical  conditions  to  study  and  technical  move- 
ments to  foUow.  In  this  direction  lies  progress.  If  he  is  going 
to  be  vnth.  us  to-morrow,  he  will  begin  to  get  busy. 


CHAPTER  XV 

THE  ADVERTISING  AGENCY 

IT  IS  estimated  that  95  per  cent,  of  the  national  adver- 
tising now  conducted  in  the  United  States  is  placed 
through  advertising  agents.  A  very  considerable  part 
of  the  local  and  territorial  advertising  also  is  conducted  in 
this  manner. 

No  accurate  data  exist  showing  the  exact  number  of  institu- 
tions of  this  kind  now  in  existence  in  the  country.  The  latest 
figure  given  out  by  the  American  Newspaper  Publishers 
Association,  is  235  "recognized"  agents,  and  it  is  estimated 
that  the  number  of  "unrecognized"  agents  would  bring  the  total 
up  to  approximately  375.  In  the  year  1889,  the  second  year 
in  which  Printers'  Ink  was  published,  that  paper  issued  a  list 
of  "recognized"  agents  in  the  United  States.  There  were 
41  names  on  this  list. 

Not  only  has  the  number  increased  from  41  to  375,  but  the 
amount  of  business  done  by  many  of  the  agencies  has  increased 
enormously 

*  "  One  agency,  for  instance,  which  for  twenty  years  or  more 
has  counted  but  one  in  the  list  of  agents,  compares  its  present 
number  of  accounts  by  those  of  two  decades  ago  at  the  ratio 
of  1  to  60.  And  four  of  these  accounts  began  to  advertise 
with  an  annual  appropriation  aggregating  less  than  $10,000, 
and  now,  after  a  few  years,  aggregate  more  than  a  million  — 
100  times  as  much." 

An  interesting  record  was  recently  unearthed  reporting  the 
work  of  the  National  Association  of  Advertising  Agents  at 

*Pnnters'  Ink,  July  20,  1911,  p.  158. 

493 


494        ADVERTISING  AS  A  BUSINESS  FORCE 

its  convention  held  in  the  Astor  House,  New  York  City,  on 
April  16,  1873.  The  records  of  this  convention  are  particu- 
larly interesting  in  that  they  show  that  nearly  all  of  the  five 
main  topics  of  discussion  at  that  meeting  were  such  as  might 
very  appropriately  be  considered  at  a  gathering  of  advertising 
agents  now  after  a  lapse  of  nearly  forty  years. 

1.  "On  the  relations  of  advertising  agents  with  publishers 
who  do  not  recognize  the  rights  of  agents  or  allow  them  any 
commission  on  advertisements. 

2.  "On  the  relations  of  advertising  agents  with  publishers 
who  ostensibly  recognize  the  rights  of  agents  and  allow  the 
usual  commission  but  in  various  ways  encourage  and  practise 
acts  which  work  to  the  disadvantage  and  injury  of  agents. 

3.  "On  the  recognition  of  new  advertising  agents. 

4.  "On  the  relation  of  advertising  agents  to  each  other 
and  to  canvassers  and  persons  who  express  a  desire  or  intention 
of  becoming  agents. 

5.  "On  the  relation  of  advertising  agents  to  advertisers." 
The  resolutions  adopted  in  connection  with  this  last  topic 

are  of  particular  interest  and  value  in  the  light  of  forty  years 
of  subsequent  discussion.     They  were  as  follows  • 

*ON  THE  RELATION  OF  ADVERTISING  AGENTS  TO  ADVERTISERS 

Whereas,  Newspaper  advertising  agents  derive  their  profits 
from  commissions  allowed  by  publishers,  and  these  profits 
depend  upon  securing  advertising  contracts  and  obtaining  pay- 
ment for  the  same,  therefore  it  is  evident  that  the  agent  must 
work  for  the  interests  of  the  advertiser  quite  as  much  as  for 
those  of  the  publisher  whom  he  represents.     And, 

Whereas,   It  is  asserted  and  believed  among  ad- 

Agency    vertising  agencies  that  the  average  beginner  in  adver- 

Problems  ^jgjng,  who  relies  upon  his  own  unaided    judgment, 

Ymrs     "^^^^  ^^^'  ^^  ^  rule,  procure,   for  any  fixed  sum  of 

Old       money,  more  than  one  half  the  publicity  which  would 

be  obtained  for  him  with  the  same  amount  in  the 

hands  of  an  agent  of  experience;  and  that  on  the  largest  con- 

*Pnnters'  Ink,  August  31,  1911,  p.  34. 


THE  ADVERTISING  AGENCY  495 

tracts  for  experienced  advertisers,  those  agents  whose  facihties 
are  first-class  secure  for  their  patrons  as  low  rates  as  could  be 
obtained  in  direct  dealings  with  the  publishers  and  make  their 
commission  intact;  and. 

Whereas,  There  has  not  been  a  single  instance  in  the  past 
twenty  years  of  an  advertiser  who  has  achieved  a  conspicuous 
success  without  contracting  mainly  through  newspaper  adver- 
tising agencies,  and  that  the  competition  among  agencies  and 
the  adoption  by  some  publishers  of  fictitious  rates  are  the  main 
causes  which  lead  to  the  demoralization  of  the  agency  business 
and  to  the  practice  of  dividing  commissions  with  advertisers, 
and  that  in  this,  as  in  other  matters,  it  will  be  wise  for  agencies 
to  adopt  some  rule  for  their  guidance;  therefore,  it  is  hereby 

Resolved,  That  no  advertising  agent  is  justified  in  dividing 
with  an  advertiser  the  commission  which  he  received  from  the 
publisher,  unless  it  can  be  shown  that  the  publisher  in  question 
has,  at  least  in  one  instance,  been  known  to  make  a  similar 
deviation  to  the  advertiser  direct,  and  that,  in  case  this  cannot 
be  shown,  it  shall  be  considered  dishonorable  to  divide  a 
commission,  or  discount  the  regular  rates.  That  we  deprecate 
the  custom  of  accepting  the  entire  business  of  any  advertiser 
for  a  stipulated  sum  per  annum  in  lieu  of  commission,  and  we 
recommend  that  any  agent  conducting  business  on  this  plan 
shall  discontinue  it  as  soon  as  present  conrtacts  expire.  That 
in  contracting  with  advertisers  for  the  insertion  of  advertise- 
ments in  papers  which  cannot  be  relied  upon  to  demand  a 
uniform  price,  the  agent  will  best  serve  the  interest  of  all 
parties  by  declining  to  name  a  positive  price,  but  should  name 
a  price  at  which  he  expects  to  obtain  insertion,  and,  if  the 
same  is  refused,  it  shall  be  at  the  option  of  the  advertiser  to 
increase  his  offer,  or  to  omit  the  paper  from  his  list. 

That  in  no  case  is  any  agent  justified  in  charging  or  receiving 
from  any  advertiser  a  larger  sum  for  any  advertisement  than 
would  be  required  by  the  publisher's  schedule  of  rates;  but 
that  when  an  agent  is  induced  to  "speculate"  in  advertising, 
thereby  making  himself  a  principal,  and  contracting  with  the 
advertiser  for  insertions  in  certain  papers,  without  regard 
to  the  prices  which  may  be  required  of  him,  in  such  cases, 
as  the  agent  risks  a  loss  by  the  chance  of  paying  large  advances 
to  some  papers,  he  may  also  be  entitled  to  an  extra  profit, 
even  beyond  his  commission,  should  he  succeed  in  procuring  the 
service  at  less  than  the  contracted  price.     It  is  hereby  further 


496        ADVERTISING  AS  A  BUSINESS  FORCE 

Resolved,  That  in  all  cases  where  an  advertiser  contracts 
with  an  advertising  agent  for  the  insertion  of  an  advertisement 
in  any  paper  or  list  of  papers,  on  which  he  has  himself  already 
procured  an  estimate,  the  contracts  shall  not  be  binding  on  the 
agent  unless  the  advertiser,  at  the  time  of  asking  his  estimate, 
shall  inform  the  agent  that  he  has  already  secured,  or  intends 
before  giving  out  the  order,  to  secure  the  publisher's  estimate. 
It  is  further  hereby 

Resolved,  That  we  will  furnish  advertisers  with  files  of 
papers  for  their  examination,  at  our  offices,  at  any  time  witliin 
three  months  after  the  dates  of  publication,  and  that  for  any 
advertiser  who  will  not  make  such  examination,  but  requires 
to  see  papers  at  his  own  ofiice,  arrangements  shall  be  made  to 
secure,  as  far  as  possible,  the  sending  of  the  papers,  at  his 
expense,  direct  from  the  office  of  publication.  It  is  impolitic 
to  permit  our  files  in  office  to  be  rendered  incomplete  for  the  ac- 
commodation of  any  individual  advertiser.     It  is  further  hereby 

Resolved,  That  as  it  is  thought  proper  that  some  rule  should 
be  adopted  to  regulate  the  class  of  business  which  we  will 
receive  and  forward,  and  that  as  this  is  a  matter  about  which 
widely  different  opinions  prevail,  we  will  adopt  as  a  criterion, 
that  we  will  not  receive  or  forward  for  publication  in  any  paper 
any  advertisement  to  which  we  would  refuse  insertion  in  a 
first-class  morning  daily  were  such  a  one  under  our  charge, 
and  that  the  class  of  business  accepted  by  agencies  under  this 
resolution  shall  be  the  scale  by  which  may  be  measured  their 
own  estimation  of  their  own  moral  status. 

THE   WORK   OF   THE   AGENCY 

The  service  out  of  which  the  work  of  the  modern  advertising 
agent  has  grown  up  is  the  service  of  space  brokerage.  The 
buying  of  space  is  still  one  of  the  most  important  parts  of  the 
agent's  work  no  matter  how  many  other  lines  of  service  he 
may  undertake  to  perform.  It  is  this  service  which,  in  the 
case  of  most  agencies,  is  still  made  the  basis  of  payment  to  the 
agent  and,  as  already  intimated  in  the  forty-year-old  resolutions 
which  have  been  quoted,  the  controversy  about  payment  on 
this  basis  rather  than  on  a  commission  received  from  the 
advertiser  is  an  extremely  heated  one. 


THE  ADVERTISING  AGENCY  497 

J.  R.  Wakeman,  treasurer  and  space  buyer  of  the  Van  Cleve 

Company,  of  New  York,  in  an  address  on  the  "Space  Buyer's 
Work,"  described  some  of  the  problems  which  are  involved 
in  this  the  oldest  part  of  the  advertising  agencies '  activities : 

*The  principal  and  familiar  mediums  with  which  the  space 
buyer  has  to  deal  are  the  following:  Billboards,  wall  signs, 
and. bulletin  boards,  all  classified  as  outdoor  display;  street 
cars,  magazines,  newspapers. 

Bulletin  board  display  is  sold  by  the  running  foot;  bill  posting 

is  charged  by  the  sheet,  per  week  or  per  month,  and  wall  signs 

The  Work  ^^®    charged    by  the  square  foot.      Some    outdoor 

of  the     display   signs   in  exceptional   locations,   which  may 

Space     be  seen  by  an  unusual  number  of  persons,  are  charged 

Buyer  ^^  fixed  price  for  a  given  period;  that  is,  per  week 
or  per  month. 

The  charge  for  street-car  cards  is  made  per  card  per  month. 

The  various  forms  of  outdoor  display  and  the  street-car  cards 
are  admirable  adjuncts  to  any  campaign.  And  a  good  many 
articles  have  been  introduced  to  the  public  by  the  use  of  these 
mediums  alone.  But  since,  from  the  very  nature  of  the  display 
space,  there  cannot  be  given  a  great  deal  of  argument,  these 
mediums  are  used  much  less  often  than  are  the  magazines  and 
newspapers  as  a  primary  medium  for  the  introduction  of  a 
product  about  which  there  is  a  story  to  tell. 

The  price  charged  for  outdoor  display  and  for  street-car 
space  is  based,  naturally,  on  the  prominence  of  the  outdoor  sign, 
or  the  importance  of  the  street-car  line,  because  this  determines 
the  amount  of  travel  on  the  car  line  or  along  the  thoroughfares 
from  which  the  sign  may  be  seen. 

Only  a  few  years  ago  there  was  perhaps  a  greater  lack  of 
stability  in  the  rates  charged  for  these  forms  of  publicity  than 
for  anything  else  on  earth  that  was  offered  for  sale.  I  was 
connected  about  thirteen  or  fourteen  years  ago  with  a  concern 
that  had  over  ten  acres  of  outdoor  display  and  over  36,000 
cards  in  the  street  cars  of  the  United  States,  nearly  all  east  of 
the  Mississippi.  The  prices  we  paid  were  in  many  cases  less 
than  the  cost  to  the  seller;  that  is,  we  thought  they  were, 
and  if  they  were,  naturally  some  other  advertisers  had  to  make 
up  the  loss.     And  the  inequalities  in  the  rates  were  something 

*Priniers'  Inlc,  July  4,  1912,  p.  20. 


498         ADVERTISING  AS  A  BUSINESS  FORCE 

fearful.  At  that,  we  didn't  always  get  what  we  paid  for,  or 
what  we  thought  we  were  getting.     .     .     . 

During  the  last  few  years  most  of  the  outdoor  display  space 
and  the  street-car  advertising  space  has  come  under  the  control 
of  concerns  who  are  running  their  business  in  an  honest  way, 
and  the  inequalities  which  prevailed  a  few  years  ago  do  not 
exist  now. 

It  is  in  the  selection  of  newspapers  and  magazines,  and  the 
choosing  of  those  which  are  likely  to  bring  the  quickest  results 
at  least  expense,  that  the  space  buyer  of  an  agency 
The  Selec-  proves  his  ability. 

News-         '^^^  value  of  memory  is  obviously  great  in  this 

papers  matter.  The  well-informed  and  competent  space 
buyer  must  know  about  the  newspapers  in  every  city 
in  the  United  States  and  Canada;  must  know,  when  there  are 
two  or  more  papers  in  a  city,  which  is  the  best,  not  only  as 
regards  circulation  but  also  as  concerns  its  advertising  rates  — 
whether  those  rates  are  fair  for  the  amount  and  kind  of  cir- 
culation it  has. 

He  must  know  how  many  papers  to  use  in  each  city,  to  market 
cheaply  and  effectively  the  product  which  he  is  to  advertise. 
Hs  must  have  a  pretty  thorough  knowledge  of  the  climate  in 
the  territory  where  he  is  to  sell  his  goods.  He  must  know 
whether  the  morning  papers  or  the  evening  papers  will  be  better. 

For  instance,  it  is  almost  always  the  case  that  in  tropical  or 
semi-tropical  climates  the  morning  newspaper  has  a  bigger 
and  better  class  of  circulation  than  the  evening  paper.  There 
are  exceptions,  of  course,  and  he  must  know  what  they  are. 

It  is  necessary  for  him  to  have  a  knowledge  of  the  train 
service  out  of  every  important  city,  so  that  he  may  know 
whether  or  not  the  papers  in  the  city  can  get  the  out-of-town  cir- 
culation, and  if  they  do  where  it  is.  Also,  whether  the  morning 
paper  can  more  easily  get  the  out-of-town  circulation  than 
the  evening  paper. 

If  there  be  both  one  morning  and  one  evening  paper  he  must 
decide  whether  the  circulation  of  one  duplicates  largely  the 
criculation  of  the  other,  and  should  a  city  have  a  large  number 
each  of  morning  and  evening  papers  he  must  know,  when  he 
is  making  his  decision  to  use  either  the  morning  papers  or  the 
evening  papers,  how  many  papers  to  use  so  as  to  avoid  dupli- 
cation but  still  cover  the  population  he  is  trying  to  reach. 

It  isn't  easy  to  tell  you  on  what  are  based  the  charges  for 


THE  ADVERTISING  AGENCY  499 

advertising  space  in  newspapers  and  periodicals,  because  there 
are  so  many  exceptions  to  any  rule  that  we  try  to  make. 

The  space  in  the  standard  size  magazines  is  generally  sold 

at  the  rate  of  $1  per  page  for  every  1,000  circulation;  that 

is,  if  a  magazine  has  500,000  circulation,  its  rate  is 

iSpace"^      The    space    in    women's    publications    is    sold    on 

the  basis  of  about  twelve  or  fourteen  dollars  per 

single    column    inch    for    each    200,000    circulation.     Thus    a 

column  fourteen  inches  long  in  such  a  publication,  with  a 

million  circulation,  costs  about  $900. 

In  the  big  weeklies  of  general  circulation  space  is  sold  on 
about  the  same  basis  as  in  the  women's  publications. 

Daily   newspaper   space   is   generally   considered   as   worth 

from  three  to  five  cents  per  single  column  inch  for  each  1,000 

circulation.      As  circulation  increases  rates  become 

Constant  proportionately    lower,    as    a    rule.     For    instance, 

in  Vdue   ^^  *  daily  paper  with  one  thousand  circulation  the 

rate  would  be  about  five  cents  an  inch,  while  space 

in  a  daily  newspaper  having  a  circulation  of  200,000,  instead 

of  costing  $10  an  inch,  or  two  hundred  times  as  much  as  in  the 

paper  with   one  thousand   circulation,   would  cost  about  $4 

per  single  column  inch,  or  only  eighty  times  as  much.     .     .     . 

In  any  city  or  territory  the  relative  values  of  the  newspapers 
are  constantly  changing. 

The  newspaper  which  is  most  important  this  year  may  be 
the  second  paper  next  year.  A  paper,  in  its  editorial  policy, 
may  offend  some  of  its  readers,  and  those  readers  will  drop 
that  paper  and  take  another  one.  The  paper  may  not  get 
those  readers  back  and  it  may  not  get  others  to  replace  them. 
And  even  if  it  does,  it  will  take  time. 

Or  a  particularly  aggressive  management  may  take  hold  of 
a  newspaper  and  build  up  its  circulation  so  that  from  a  relatively 
unimportant  place  it  comes  up  so  as  to  occupy  a  commanding 
position. 

Among  magazines  the  changes  come  about  correspondingly 
often,  though  the  magazines  are  so  many  less  in  number  than 
there  are  newspapers  that  the  magazine  field  is  more  easily 
watched,  and  it  is  easier  to  keep  up  with  the  variations.  You 
have  to  be  alive  to  these  fluctuations.  You  must  recognize 
them  just  as  soon  as  they  occur,  and  as  a  matter  of  fact  you 
must  learn  to  sense  them  almost  before  they  happen.     .     .     . 


500        ADVERTISING  AS  A  BUSINESS  FORCE 

The  advertising  agent's  work  as  it  is  at  present  conducted 
seldom  stops  with  mere  space  broking.  In  some  cases  the 
agency  has  developed  a  "trade  aid"  service  which  makes 
the  agency  take  on  the  nature  of  a  professional  adviser  in  all 
matters  relating  to  his  client's  distribution  policy.  A.  B. 
Freeman  of  the  Nichols-Finn  Advertising  Company,  of  Chicago, 
discusses  these  new  activities  of  the  agent  in  the  following 
terms : 

.     .     •     .     *" Agency"  to-day  means  to  a  great  number  of 

business   men   a   collection  of  persons  who   solicit  accounts, 

place  business,  quote  rates,  get  up  copy  and  check 

The       publications. 

Enlarged       g^^  there  IS  a  rapidly  growing  number  of  institu- 

of  the     tions  which  consider  these  only  incidental  to  real 

Agency    agency  service. 

The  thoroughly  up-to-date  and  conscientious 
institution  (agency  so  called)  is  composed  of  business  men  who 
have  selected  the  advertising  and  selling  end  of  business  as 
their  particular  field. 

These  men  are  business  men  before  they  are  advertising  men. 
They  are  business  counselors  and  business  advisers,  with  an 
organization  back  of  them,  to  carry  out  in  detail  what  they 
recommend  in  conference. 

To  call  these  men  "agents"  in  the  sense  that  this  word  is 
accepted  among  business  men  is  not  only  unfair,  but  positively 
untrue. 

These  men  are  students  of  commerce,  of  economics,  of 
distribution,  of  trade  conditions;  they  are  alive  to  financial 
conditions  in  practically  all  divisions  of  business.  They  know 
about  exports,  imports;  they  have  studied  commercial  law 
and  together  they  represent  a  fund  of  business  information 
such  as  no  one  man  could  give  and  such  as  no  business  man 
could  hire  outside  of  an  institution  of  this  character. 

The  commission  of  such  an  advertising  institution  on 
$100,000  worth  of  business  is  usually  from  $15,000  to  $20,000. 
Where  could  a  business  man  spend  this  amount  of  money  to 
better  advantage  than  with  such  an  organization  of  men? 


*Pnntcrs  Ink,  July  20,  1911,  p.  132. 


THE  ADVERTISING  AGENCY  501 

And  when  the  business  concern  has  selected  the  right  adver- 
tising institution  to  handle  its  business,  it  will  secure  value 
received  for  every  dollar   it   pays   for   service,  even 

Is  the     without  taking  into  consideration  the  fact  that  the 

,.  ^"'^^  „  larger  portion  of  this  remuneration  comes,  not  from 

a  Misno-  ^^^  advertiser,  but  from  the  publications. 

mer?         The  time  is  at  hand  when  the  business  man  asks 

not,  "How  much  pretty  copy  have  you  written  and 

how  big  is  your  institution?"  or,  "What  do  you  charge  for 

your  service?"  but,  "How  can  you  help  me  to  market  my 

proposition  to  better  advantage?     What  do  you  know  about 

my  market  and  the  people  I  am  trying  to  reach?     Are  you 

equipped  to  say  with  any  reasonable  surety  just  how  much 

money  it  would  take  to  do  a  certain  thing  in  an  advertising 

direction?     Are  you  in  touch  with  concerns  that  have  attempted 

or  are  doing  the  thing  I  want  to  do  or  something  enough  alike 

from  which  to  draw  a  conclusion?  " 

Even  though  the  business  man  pays  but  very  little  for  adver- 
tising agency  service,  he  is  more  and  more  becoming  particular 
regarding  the  institution  which  he  selects  to  handle  his  adver- 
tising. 

And  another  thing,  advertisers  are  beginning  to  appreciate 
that  space  costs  just  the  same,  whether  it  is  filled  with  glitter- 
ing generalities,  whether  it  is  filled  with  detrimental  copy, 
or  whether  it  has  the  quality  necessary  to  sell  goods  and  estab- 
lish good-will. 

And  aside  from  the  placing  of  copy  in  publications  there  is 
that  great  co-operative  necessity  to  an  advertising  campaign 
which  pays  no  commissions  to  the  advertising  institution  and 
is  therefore  so  often  lacking  in  the  advertising  "agency." 

Booklets  that  sell  goods  —  follow-up  letters  that  do  some- 
thing else  besides  fill  waste-baskets  —  selling  ideas  that  dove- 
tail in  with  advertising  and  make  precious  inquiries  worth 
what  they  cost;  good,  common-sense,  reason- why  literature 
to  the  dealers  that  not  only  sounds  good  to  the  firm  which  sends 
it  out,  but  grips  the  interest  of  the  most  ordinary  small  local 
dealer  and  makes  him  do  business  with  a  concern  that  can 
present  such  a  convincing  proposition  —  these  are  some  of 
the  strong  lines  of  demarcation  which  separate  the  advertising 
"institution"  from  the  mere  advertising  "agency." 

Business  men  have  been  led  to  expect  too  much  from  adver- 
tising   alone    by    over-zealous    advertising    "agencies."     And 


502       ADVERTISING  AS  A  BUSINESS  FORCE 

advertising  institutions,  on  the  other  hand,  devote  as  much 
time  and  energy,  and  even  more,  to  devising  ways  and  means 
for  the  advertiser  to  co-operate  thoroughly  with  the  advertising 
than  they  do  to  the  writing  of  the  copy  and  its  insertion  in 
the  pubhcations. 

We  have  with  us  yet,  and  may  continue  to  have  for  some 
Httle  time,  the  advertising  "agency."  But  because  the  sur- 
vival of  the  fittest  is  a  natural  law  which  business  men  must 
recognize,  there  is  no  doubt  that  the  day  of  the  advertising 
institution  has  come  and  that  "  agency  "  days  are  numbered. 

The  gap  widens  rapidly  and  what  was  once  but  a  fine  distinc- 
tion has  come  now  to  be  recognized  as  a  strong  contrast.  The 
advertising  "agency"  has  seen  the  handwriting  on  the  wall. 

Walter  Barnes  Cherry,  advertising  manager  of  the  Merrell- 
Soule  Co.,  maker  of  None-Such  Mince  Meats,  etc.,  of  Syracuse, 
N.  Y.,  not  long  ago  created  a  good  deal  of  disturbance  among 
agents  by  an  article  entitled  "What  the  Agent  Does  Not 
Know,"  in  which  he  somewhat  bitterly  assailed  the  "trade  aid" 
service  of  the  agency  of  the  present  time.  A  part  of  Mr. 
Cherry's  article  was  as  follows : 

.  .  .  *Some  of  us  have  heard  all  about  agency  "trade 
aid."  Is  there  any  such  thing?  Is  there  a  well-known  agency 
to-day  handling  the  business  of  large  national  adver- 
Methods  ^^^^^^  ^^  various  lines,  like  clothing,  furniture,  house- 
hold articles,  foods,  which  has  any  proper  concep- 
tion of  the  trade  end  of  the  accounts  it  is  promoting.''  WTiat 
agencies  maintain  commercial  investigators  who  know  the 
"retail  game".'*     Not  many.     .     .     . 

I  venture  the  prediction  that  five  years  from  now  no  adver- 
tising agency  handling  national  business  will  be  complete 
without  a  staff  of  commercial  salesmen  and  investigators, 
stronger  in  sales  ability  and  trade  investigation  than  in  writing 
copy,  outlining  a  campaign,  or  getting  a  new  client.  The  good 
copy  man  or  the  good  estimate  man  in  an  agency,  it  seems  to  me, 
should  know  much  about  the  trade  end  of  the  product  he  is 
promoting.  Anyway,  he  should  know  what  is  in  the  package, 
what  it  is  made  of,  and  how  it  is  wrapped;  certainly  where  it 

*Printers'  Ink,  May  25,  1910,  p.  9. 


THE  ADVERTISING  AGENCY  503 

is  sold,  and,  if  possible,  be  familiar  with  the  process  and  the 
source  of  production.  Unless  a  solicitor  is  thus  equipped  with 
information  he  promptly  stumbles  in  his  work  and  does  not 
do  justice  to  either  himself  or  the  prospective  customer,  or 
the  agency  he  represents. 

What  a  joy  it  would  be  for  an  advertiser  to  have  his  agency 
come  back  with  some  trade  information  the  advertiser  did  not 
have.  The  agency's  commercial  representative  could  easily 
handle  several  different  accounts  and  become  proficient  in 
canvassing  grocers,  druggists,  department  stores,  clothiers,  and 
other  trades  represented  in  his  home  office  accounts.  Then, 
too,  the  agency's  commercial  man  might  find  out  things  the 
advertiser's  own  men  would  skip.  Anyway,  the  agency's 
commercial  man  would  approach  the  dealer  from  a  new  view- 
point, and  if  he  confirmed  the  advertiser's  information,  that 
would  be  some  satisfaction;  and  if  he  could  demonstrate  that 
the  advertiser's  methods  with  the  trade  were  open  to  change 
or  betterment,  that  would  be  even  a  greater  service.     .     .     . 

In  reply  to  Mr.  Cherry's  article  a  number  of  letters  were 
written  by  representatives  of  agents  who  took  exception  both 
to  Mr.  Cherry's  statements  and  to  his  reasoning  about  them. 
The  replies  of  some  of  the  agents  are  given  below.  One  agent 
whose  name  is  not  given  is  quoted  as  follows : 

*"  Some  have  the  notion  of  the  past  decade  that  an  agency 

is  purely  a  space  brokerage  office  with  a  little  mildly  harmless 

copy  writing  thrown  in  for  those  who  will  have  it; 

The  Reply  -^"^[{q  there  are  others  who  simply  lay  the  whole 

Agent     burden   of   the   business   on   the   agent's   shoulders, 

as  if  he  should  direct  the  salesmen,  correspond  with 

retailers,   open  new  territory,   call  on  the  trade,   etc.,  while 

the  sales  manager  simply  lolls  back  in  his  chair  and  waits 

for  wonderful  things  to  happen. 

"Of  course,  both  views  are  wrong.  An  agent  is  a  'profes- 
sional man,  remember,  and  his  function  is  always  advisory. 
He  makes  contracts  with  his  clients  not  to  manage  the  sales 
department,  but  to  supply  that  rapidly  increasing  scope  of  selling 
plan  and  help  which  involves  the  use  of  language,  picture 
and   paper.     These   are   simply   his   tools,   however,    and   an 

^Printers'  Ink,  June  16,  1910,  p.  47. 


504        ADVERTISING  AS  A  BUSINESS  FORCE 

agent  is  a  sorry  incompetent  nowadays  if  he  hasn't  practical 
business  experience,  imagination,  and  effectiveness  enough 
to  know  how  to  make  these  tools  produce  results  along  lines 
which  the  advertiser  has  not  before  thought  possible. 

"You  see,  it's  a  comparatively  easy,  sleepy  job  to  be  an 
agent  for  some  old  concern  with  distribution  all  settled  and  copy 
all  set  in  movdds  —  as  Walter  Baker's,  for  instance.  But  the 
great  modern  volume  of  advertising  and  business  effort  is 
concentrated,  not  on  holding  and  leisurely  developing  prestige, 
but  upon  rapid,  aggressive  creation  of  sales  and  securing  of 
retail  outlets,  often  in  the  face  of  severe  competition  and 
for  a  product  and  a  concern  absolutely  new. 

"The  agent  should  be  capable,  and  a  considerable  number 
are  capable,  of  analyzing  a  selling  proposition  thoroughly 
enough  to  know  what  advertising  tools  to  apply  to  secure 
desired  results  most  cheaply.  Having  furnished  the  tools, 
it  is  up  to  the  sales  manager  and  his  staff  to  use  them  and 
co-operate  with  them.  I  have  seen  not  a  few  cases  where  a  good 
agent  has  revolutionized  a  manufacturer's  business  and  fur- 
nished far  more  merchandising  skill  than  is  properly  in  an  agent's 
province,  and  securing  only  a  broker's  pay  for  it,  too. 

"The  advertising  agent,  I  believe,  in  nine  out  of  ten  cases 
(where  he  is  not  simply  a  plain  crook  or  a  raw  incompetent) 
returns  more  brains  and  service  to  his  client  than  any  other 
professional  man.  In  the  one  case  which  I  recall  just  now 
where  an  agency  failed  to  make  things  go  for  a  client,  that 
client  has  admitted  to  me  that  just  one  idea  secured  from  that 
agent  who  failed  was  worth  all  the  cost  of  his  services  and  the 
cost  of  the  unsuccessful  campaign. 

"The  agent  is  properly  the  lawyer  for  the  manufacturer 
for  presenting  a  winning  case  for  his  goods  to  the  public.  But 
of  late  years  he  has  become  more  —  he  has  become  a  lawyer 
for  the  manufacturer  in  presenting  his  case  to  the  dealer  as  well. 
In  a  number  of  cases  he  has  of  his  own  account  made  himself 
still  more  —  a  selling  and  distribution  analyst.  He  has  de- 
veloped into  this  because  he  has  found  that  so  many  manufac- 
turers have  not  solved  their  problems  of  this  kind,  and  cannot 
successfully  make  use  of  his  advertising  services  until  they  do. 
Manufacturers,  to  put  it  plainly,  are  asking  more  and  more 
expert  sales  advice  from  agents.  So  he  has  pitched  in  — 
making  plenty  of  mistakes,  but  on  the  whole  becoming  a 
distinctly  beneficial  stimulant  and  aid  to  manufacturers." 


THE  ADVERTISING  AGENCY  505 

The  emphasis  which  the  Federal  Advertising  Agency,  New 
York,  places  on  merchandising  knowledge  makes  interesting 
the  words  of  William  Handley,  business  manager, 
fr-^^^  f  on  the  subject  of  agency  trade  knowledge : 

Amther    '"^^  have  been  on  the  buying  side  is,  I  believe,  a 

Agency  most  essential  part  of  the  training  of  an  agency  man. 
In  no  better  way  can  he  learn  the  weakness  of  agency 
work,  as  it  has  been  conducted,  and  especially  the  unprepared- 
ness  of  the  average  solicitor.  But  agency  organization  has 
seen  a  new  light  during  the  past  year  or  two,  and  it  is  now 
possible  to  find  agencies  whose  management  has  been  broad- 
gauged  enough  to  plan  and  form  agencies  capable  of  giving 
true  merchandising  service. 

"Mr.  Cherry,  in  his  article,  'What  the  Agent  Does  Not 
Know, '  predicts  that '  five  years  from  now  no  advertising  agency 
handling  national  business  will  be  complete  without  a  staff  of 
commercial  salesmen  and  investigators,'  whereas  the  best 
agency  practice  to-day  takes  representative  men  in  various 
callings,  rounds  out  their  training  in  advertising  methods, 
thus  making  available  service  and  more  truly  professional 
advertising  men. 

"And  now  the  question  to  Mr.  Cherry:  Suppose  any 
agency  having  a  man  who  has  studied  the  grocery  trade, 
knows  all  its  inner  workings,  trade  stunts,  etc.,  should  solicit 
your  account  with  a  certain  new  trade  selling  plan  in  mind, 
would  you,  after  investigating  the  standing  of  the  man  and 
his  agency,  take  him  through  your  plant  and  really  into  your 
confidence  to  allow  him  to  perfect  his  plan?  This  is  no  more 
than  your  doctor  would  expect  of  you  or  your  lawyer  would 
demand  in  order  that  he  could  effectually  prescribe. 

"Many  merchants  and  manufacturers  expect  this,  however, 
and  balk  the  advertising  man  at  every  turn.  He  has  no  chance 
to  study  the  individual  proposition,  is  given  no  opportunity 
to  learn  certain  and  vital  points  which  can  make  for  or  spoil 
the  real  marketing  and  advertising  possibilities. 

"There  is  such  a  thing  as  'trade  aid'  in  many  advertising 
agencies,  and  even  now  it  is  much  more  comprehensive  than 
Mr.  Cherry  knows.  Agencies  where  the  merit  of  a  product, 
trade  condition,  possible  demand,  and  factory  capacity  are 
investigated;  where  a  knowledge  of  trade  papers  is  an  asset; 
where  real  sales  plans  are  outlined;  where  window  trimming 
and  dealer  helps  are  worked  out  in  a  practical  manner;  and 


506        ADVERTISING  AS  A  BUSINESS  FORCE 

where  consumer  advertising  is  made  but  one  link  in  the  properly 
worked  out  campaign,  are  to-day  available  to  the  manufacturer 
who  will  seek.  Too  many  manufacturers  employ  an  agency 
because  So-and-so  is  a  good  fellow,  or  some  one  else  put  over 
this  or  that  big  campaign." 

Writes  the  Franklin  P.  Shumway  Company,  Boston: 

"  Our  attention  has  been  called  to  Mr.  Cherry's  article  in  your 
current  issue  by  some  of  our  customers  for  whom  we  have  for 
the  past  three  years  been  doing  just  what  Mr.  Cherry  claims 
is  not  done  by  advertising  agents. 

"We  continually  keep  on  the  road  a  staff  of  trained  salesmen, 
whose  entire  duty  is  to  visit  retailers,  talk  with  them  regarding 
trade  conditions,  suggest  to  them  new  ideas  about  pushing 
our  customers'  products,  learn  all  they  can  about  rivals* 
products,  and  make  a  definite  report  on  a  printed  blank  which 
is  kept  on  file  in  our  office  for  instant  reference  by  either  our 
customers  or  ourselves.  These  men  are  not  allowed  to  take 
an  order,  and  rarely  even  talk  prices,  but,  having  a  thorough 
knowledge  of  the  goods  they  are  interested  in,  are  prepared 
to  discuss  quality,  pattern,  etc.,  all  day  long. 

"In  addition  to  these  men  who  work  exclusively  for  certain 
manufacturers,  whom  we  have  the  pleasure  of  serving,  we  also 
have  other  men  who,  by  reason  of  training  and  natural  ability, 
are  fitted  to  travel  from  city  to  city,  and  size  up  the  possible 
market  for  a  product,  report  in  detail  what  is  being  done  in 
competing  lines,  and,  after  visiting  several  hundred  retailers, 
are  in  a  position  to  make  a  report  which  is  used  by  our  office 
solicitors  in  discussing  advertising  with  would-be  advertiser. 

"Neither  of  these  two  groups  of  men  have  any  connection 
with  our  soliciting  force,  who  work  exclusively  in  our  own 
interests,  and  the  second  group  are  often  sent  out  with  instruc- 
tions to  secure  certain  information  from  retailers,  without 
having  any  idea  why  they  are  requested  to  secure  the  infor- 
mation, or  for  whose  benefit  it  is  to  be  used. 

"To  illustrate,  a  certain  manufacturer's  salesman  reported 
that  he  couldn't  sell  his  goods  to  any  extent  in  a  portion  of 
the  Southwest.  Our  men  visited  over  two  hundred  tailors 
in  that  section  who  ought  to  sell  these  goods,  and  found  that 
the  manufacturer's  salesman  was  entirely  at  fault,  and  the 
final  result  is  that  this  manufacturer  is  now  selling  $40,000 
to  $45,000  worth  of  his  goods  in  that  section  each  season, 
and  there  is  every  probability  that  he  will  soon  sell  $150,000 


THE  ADVERTISING  AGENCY  507 

a  year,  where  before  he  wasn't  seUing  practically  a  dollar's 
woi'th." 

THE   AGENCY^S   RELATIONS   TO   THE  ADVERTISER 

These  changes  in  the  functions  of  the  agency,  and  the  attempt 
on  the  part  of  many  agencies  to  branch  out  from  their  old 
position  as  space  brokers  into  what  is  virtually  an  entirely 
new  field  as  professional  advisers  of  advertisers  on  commercial 
problems,  have  led  to  a  series  of  rather  complicated  problems 
concerning  the  relations  between  the  agent  and  the  advertiser 
whom  he  serves. 

Not  the  least  troublesome  of  these  problems  is  that  which 
is  involved  in  the  almost  inevitable  misunderstanding  arising 
sooner  or  later  between  the  agency  and  the  advertiser  as  to 
just  what  forms  of  advertising  will  accomplish  the  desired 
results. 

If  we  could  imagine  a  case  of  a  physician  being  retained  in 
a  medical  case  in  which  the  symptoms  were  all  obscure,  and  in 
which  the  patient  was  convinced  that  he  had  a  peculiar  disease 
which  had  never  been  encountered  before,  we  could  very  readily 
understand  that  it  would  take  something  besides  mere  medical 
skill  on  the  part  of  the  physician  to  avoid  an  open  break  with 
his  patient  —  to  say  nothing  of  effecting  a  cure. 

One  of  the  difficulties  growing  out  of  the  new  attitude  of 
the  advertising  agent  toward  his  client  is  the  trouble  involved 
in  adjusting  the  relations  between  the  advertiser's  own  adver- 
tising manager  and  the  advertising  agent.  Some  of  the  salient 
features  of  this  group  of  troubles  are  brought  out  in  the  following 
discussions  written  by  the  "Advertising  Manager  of  a  Famous 
Men's  Clothing  House,"  whose  name  is  not  given: 

*A  manufacturer  who  had  made  up  his  mind  to  take  the 
fatal  plunge  and  advertise  a  product  of  undoubted  merit  came 
to  me  and  said : 

"I  have  made  up  my  mind  to  start  a  national  campaign. 

*Pnnters  Ink,  November  10,  1910,  p.  10. 


508        ADVERTISING  AS  A  BUSINESS  FORCE 

The  questions  of  agencies  has  bothered  me  a  good  deal.  You 
have  had  experience  with  the  agency  proposition.  What 
agency  would  you  advise  me  to  tie  up  with?  " 

To  this  question  I  answered,  in  the  Yankee  manner,  by 
asking  another. 

"Have  you  hired  a  man  to  take  care  of  your  advertising?  " 

"No;  if  I  get  in  with  an  agency  I  shall  not  need  a  man  to 
take  care  of  my  advertising." 

Here  is  where  this  manufacturer  and  I  parted  in  our  opinions. 

An  advertising  agency  is  unquestionably  a  tremendous  help 
in  the  preparation  and  administration  of  an  advertising  cam- 
paign. Even  the  weakest  agencies  will  often  produce  a  valuable 
idea,  and  present  a  useful  scheme.  But  the  advertising  agency 
is  seldom  qualified  to  assume  the  complete  control  of  any 
advertising  proposition.  A  lawyer  whom  you  call  into  consul- 
tation over  some  uncertain  exploitation  of  your  affairs  is  not 
expected,  and  does  not  expect,  to  undertake  the  management 
of  your  business.  The  position  of  agency  and  the  lawyer  is 
in  a  good  many  ways  pretty  closely  alike.  I  have  always 
considered  it  mistaken  economy  for  an  advertiser  with  a  business 
of  national  scope  to  hand  over  his  advertising  affairs  without 
let  or  hinderance  to  the  direction  of  an  agency. 

The  case  of  the  manufacturer  who  was  quoted  above  will 

serve  as  evidence  in  this  contention.     He  closed  a  contract 

with  an  agency  of  undoubted   repute.     His  appro- 

Where  priation  was  estimated  at  more  than  $100,000 
^^n'f^Iif  ^^^   ^^^^   year   of   his   campaign.     This   agency 

the  Ad-    ^^^    achieved    a    reputation    for    employing    high- 

vertidng   salaried    experts    with    enviable    batting    averages. 

A  few  weeks  after  my  friend  had  signed  up,  I  met 

him  at  luncheon  with  a  young  man  who  looked  very  much 

as  if  he  had  just  left  college.     He  was  introduced  to  me  as 

"Mr. ,    of    the agency."     We    fell    to    talking    and 

he  told  me  he  "had  run  down  for  a  day  or  two  to  look  into  the 
plant  and  get  enough  stuff  for  the  season's  copy."  This 
interested  me,  and  we  talked  apace.  I  found  that  his  adver- 
tising experience  had  lasted  but  little  more  than  a  year;  that 
he  was  one  of  the  copy  staff  of  this  agency,  and  that  he  had 
been  assigned  to  write  the  campaign  for  this  particular  adver- 
tiser. He  said  he  would  gather  the  materials  for  the  campaign 
in  two  or  three  days. 

The  campaign  was  launched  in  most  of  the  magazines  of 


THE  ADVERTISING  AGENCY  509 

national  circulation  and  in  some  others.  The  copy  was  bland; 
it  had  no  specific  faults  of  grammar  or  of  style.  But  it  was 
superficial.  The  ring  of  authority  was  not  in  it.  The  young 
man  had  gathered  his  material  in  two  or  three  days  —  and 
his  copy  showed  it.  The  sentences  were  balanced,  they  told 
the  truth,  but  when  one  looked  away  from  the  advertisement 
and  weighed  it  as  a  whole,  as  all  advertisements  should  be 
weighed,  it  fell  flat  like  a  punctured  dirigible. 

What  was  the  trouble?  The  agency  was  a  good  one, 
with  a  reputation.  The  manufacturer  who  was  paying  the 
bills  seemed  to  be  satisfied.  The  advertisements  looked 
attractive,  but  at  the  end  of  the  year  he  was  a  little  aghast 
at  the  bills,  and  a  little  breathless  at  the  other  side  of  the 
ledger.  The  trouble  was  just  this:  Superficiality.  This  is 
the  trouble  with  far  too  many  agencies.  They  load  their  guns 
with  the  same  kind  of  powder,  but  they  gauge  their  shot  to 
birds  when  they  ought  to  be  loading  for  duck.  I  am  not  saying 
that  all  agencies  are  guilty  of  this  fault;  but  I  do  assert  that, 
averaged  up,  the  agency  that  is  permitted  to  play  a  lone  hand 
is  prone  to  fall  into  this  ditch. 

There  was  a  business  that  had  taken  nearly  half  a  century 
to  build  up.  It  was  full  of  traditions,  of  methods  peculiar 
to  itself;  the  system  of  honor  among  its  employees,  and  their 
devotion  to  the  common  cause  were  essentially  its  own.  These 
characteristics  are  not  solely  the  property  of  this  one  concern. 
They  belong  to  all  great,  yes,  and  to  all  little,  concerns,  too, 
that  have  hewed  out  a  way  to  put  before  the  people  a  product 
that  is  better  than  any  other  product  of  its  kind.  This  atmos- 
phere was  the  advertising  asset  of  that  business.  But  to  be 
assimilated  and  digested  for  reproduction  into  real  advertising 
copy  for  that  particular  business  would  have  required  the 
living  and  sleeping  and  eating  with  that  business  for  months. 

This  is  why  I  believe  that  the  best  interests  of  prospective 
advertisers  are  brought  out  only  when  the  agency  can  come 
into  close  personal  contact  with  some  one  who  understands 
advertising  principles,  and  at  the  same  time  has  a  deep  personal 
familiarity  with  the  essentials  and  the  details  of  the  business. 
No  one,  clever  though  he  may  be,  and  gifted  with  an  exhaustless 
fountain  pen,  can  get  the  atmospheric  touch  that,  reproduced, 
gives  advertising  copy  the  breath  of  individual  life  that  sells 
the  goods  because  they  have  that  one  and  inseparable  trade- 
mark.    .     .     . 


510        ADVERTISING  AS  A  BUSINESS  FORCE 

The  attitude  of  the  agency,  especially  the  powerful  one  with 

tradition  behind  it,  toward  the  advertising  manager  is  curious. 

One  of  the  foremost  agencies  in  this  country  for  years 

Co-opera-  refused  to  co-operate  with  the  advertising  manager. 
CoptT     '^^^  agency  submitted  a  plan  of  campaign,  presented 

Building  copy,  and  outlined  the  whole  course  procedure, 
and  the  advertiser  had  to  take  it  or  leave  it.  Then 
along  came  an  advertising  manager  who  suggested  that,  perhaps, 
it  might  not  be  a  bad  scheme  for  the  interests  of  everybody 
concerned  to  let  him  get  together  with  some  bright  young  man 
of  the  agency  staff  and  see  if  the  two  of  them  might  not  be  able 
to  hack  out  some  stuff  that  would  be  more  worth  while.  His 
suggestion  was  overruled.  He  insisted,  and  took  the  matter 
to  the  headquarters  of  his  business.  Correspondence  followed, 
and  finally,  as  a  concession,  the  agency  submitted  to  the  plan. 
This  acquiescence,  however,  w^as  tempered  with  vague  alarm, 
and  an  uneasy  sense  of  having  stirred  the  dust  heaps  of  the  past. 
The  advertising  manager  picked  out  a  likely  staff  man  on  the 
agency  list,  discovered  they  had  friends  in  common,  and  soon 
found  himself  sincerely  liking  his  colaborer.  They  met 
morning  after  morning,  spent  hours  in  reminiscences  and 
argument,  and  occasionally  turned  out  a  page  of  copy.  In  the 
course  of  this  association  the  advertising  manager  turned 
over  to  the  agency  man  all  the  ideas,  the  hints,  the  details 
that  he  had  picked  up  around  the  works,  and  the  agency  man 
in  his  turn  handed  out  all  the  experience  and  adventures  and 
scars  of  a  score  of  wilderness  campaigns.  What  was  the  out- 
come? A  series  of  advertisements  that  make  people  sit  up 
and  take  notice.  Both  men  had  co-operated  to  the  extent 
of  their  powers,  and  both  had  poured  into  the  copy  the  ripened 
wine  of  their  united  experience. 

To-day  the  keynote  of  that  agencj^'s  solicitation  is  the  close 
co-operation  between  the  advertiser  and  the  agency  staff. 

I  have  been  dwelling  overlong  on  the  copy  end  of  advertising. 
This  is  an  important  feature  of  advertising,  but  by  no  means 
the  most  important.  This  point  I  want  to  emphasize  strongly. 
Over  it  has  toppled  many  a  fairly  reared  advertising  edifice. 
Copy  is  the  last  thing  that  an  advertiser  should  permit  to  be 
talked  about  or  touched.  Yet  too  often  the  subject  is  the 
one  which  the  agency  insists  upon  discussing  first  of  all.  Copy 
is  the  tangible,  visible  return  which  the  advertiser  receives 
for  his  money,  and  with  probably  unconscious  yielding  to  this 


THE  ADVERTISING  AGENCY  511 

weakness  of  human  nature  the  agency  will  prepare  first  of  all 
the  copy  —  and  when  that  is  completed,  but  little  time,  alas, 
remains  for  the  real  essentials  of  the  campaign's  success. 

*Agencies  have  solicited  me  by  the  dozen,  and,  unless  my 

memory  is  playing  me  false,  not  one  has  presented  its  claims 

as  it  has   seemed  to  me   an  agency  ought  to  do  it. 

The      In  a  talk  with  a  representative  of  one  of  the  greatest 

Agency  s  agencies   in   this   country   I   spoke   my   mind   quite 

Study  Dis-  freely  about  this  and  asked  him  why  so  important 

tribution   a  point  was  so  generally  subordinated.     He  admitted 

it  was  a  mystery    to  him.     The    point    is  that  of 

distribution.     I  told  this  representative  that  if  he  should  be 

soliciting   business   of    a    potentially    national   advertiser   in 

Massachusetts,  the  place  to  begin  on  should  be  California. 

How   are  this   manufacturer's   goods   sold   in  San   Francisco.'^ 

Are  they  sold  there  at  all.'*     If  not,  why  aren't  they?     These 

are  questions  that  make  the  manufacturer  who  is  self-satisfied  — 

and  most  of  them  are  —  sit  up  and  take  notice.     An  intelligent 

grasp  of  a  business's  business  leads  a  solicitor  right  into  the 

last  office  where  all  the  furniture  is  polished  mahogany.     Copy 

can  follow  in  due  time.     Again  permit  me  to  say  that  all 

agencies  do  not  fall  short  on  this  point.     Of  late  years  they  have 

developed  along  the  selling  analysis  line  in  a  most  gratifying 

manner.     But  the  average  is  where  one  is  compelled  in  fairness 

to  strike;  and  the  average  is  yet  lower  than  it  should  be.     .     . 

I  have  often  wondered  how  some  of  the  organizations  for 
selling  advice  to  business  men  exist  even  for  a  year.  No  less 
a  wonder  is  it  how  business  men  of  shrewd  enough  minds  to 
bring  their  products  to  the  advertising  stage  can  swallow 
the  advice  dosed  out  to  them. 

The  real  agency,  the  one  founded  on  sound  business  and 
professional  concrete,  is  becoming  a  power  in  the  industrial 
world.  I  have  been  asked  by  prospective  advertisers  whether 
they  should  choose  a  small  agency  or  a  big  one.  I  have  always 
answered  this  question  warily.  If  by  a  small  agency  they  mean 
one  with  few  accounts,  more  than  one  can  be  found  whose 
record  is  aglow  with  enthusiasm  and  success.  If  they  mean 
by  a  big  agency  one  whose  accounts  total  into  the  millions, 
many  are  achieving  tremendous  successes  every  year.  The 
question  of  the  agency  is  almost  precisely  similar  to  the  question 


*Printers  Ink,  November  17,  1910,  p.  51. 


512         ADVERTISING  AS  A  BUSINESS  FORCE 

of  the  college  for  the  boy.  Shall  he  be  sent  to  the  small  college 
or  the  big  college?  The  answer  lies  solely  with  the  man  who 
asks  it  and  the  business  he  is  interested  in. 

In  conclusion  to  this  rambling  and  necessarily  superficial 
discussion  of  an  interesting  subject,  let  me  urge  the  advertiser 
who  is  engaged  with  an  agency  that  is  giving  him  ample  service, 
not  to  desert  that  agency  for  new  gods.  A  natural  inquiry 
here  is,  what  is  ample  service.'^  In  a  sentence,  ample  service 
on  an  agency's  part  is  selling  the  most  goods  for  you  at  the 
least  expense  to  your  treasury. 

Good  sound  advice  is  an  ingredient  of  ample  service.  I  know 
of  an  agency  that  is  so  jealous  of  its  reputation  that  more  than 
once  it  has  run  the  risk  of  making  an  eternal  enemy  by  advising 
a  would-be  client  to  forsake  all  idea  of  advertising  his  product. 
Undoubtedly  in  the  files  of  many  agencies  can  be  found  corre- 
spondence keyed  to  as  high  a  plane  as  this. 

Keep  the  mails  busy  with  letters  to  and  from  your  agency. 
Clients  of  some  agencies  have  told  me  that  their  files  between 
seasons  contain  nothing  but  the  agency's  bills.  This  in  a 
measure  is  the  fault  of  the  advertiser.  The  best  intentioned 
agency  is  after  all  based  upon  human  ingenuity  and  run  by 
human  brain  power;  and  both  are  pretty  strongly  geared  up 
to  human  nature. 

When  I  advise  sticking  to  the  agency  that  is  delivering 

the  goods  I  feel  almost  as  if  I  were  guilty  of  uttering  a  platitude. 

Yet  many  of  my  readers  can  call  to  mind  without 

The       great  effort  more  than  one  instance  of  advertisers 

Persistence  j^^'^P'^^S  from  agency  to   agency  like  grasshoppers 

in  the  back  pasture,  and  never  staying  lit.     In  some 

cases  there   may  be  good  excuse  for   such  instability,  but  I 

have  too  much  respect  for  the  high-class  agency's  capability 

to  blame  them  always  for  failure  to  hold  an  account.     One 

house  with  which  I  am  familiar  has  been  receiving  the  services 

of  one  agency  for  nearly  ten  years.     At  times  things  have 

come  up  which  both  have  regretted.     Again  let  me  point  out 

that    human    institutions    are    but   human.     Yet    the    things 

that  have  been  gained  from  that  agency  have  been  |f ully  worth 

the  money  that  has  passed  from  one's  bank  account  into  the 

other's.     Both  houses  have  received  good  advice.     What  the 

agency  learned  from  its  association  with  the  house  strikes  a 

fair  balance  with  what  the  house  has  learned  from  our  dealings 

with  the  agency. 


THE  ADVERTISING  AGENCY  513 

This  condition  is  true  in  the  relations  of  all  clients  with 
their  agencies,  when  the  relations  are  adjusted  as  they  should 
be.  Many  and  many  a  prospective  advertiser  has  passed  up 
bright  prospects  of  success  because  he  failed  to  grasp  the 
agency's  point  of  view,  was  incapable  of  understanding  the 
agency's  plan  of  procedure.  To  plan  a  campaign,  to  lavish 
upon  a  layout  of  copy  the  best  brains  in  your  establishment, 
and  then  be  compelled  to  stand  by  and  behold  that  fabric 
torn  to  shreds  by  the  narrow-gauge  mind  of  the  man  you  are 
working  it  out  for,  is  one  of  the  most  harrowing  experiences 
that  a  human  being  can  be  asked  to  face.  Yet  in  the  course 
of  an  agency's  year  this  thing  occurs  again  and  yet  again. 

This  leads  me  back  to  where  I  started.  I  believe  that  the 
agency  will  agree  with  me  when  I  repeat  that  for  all  concerned 
in  an  advertising  campaign,  both  the  advertiser  and  the  adver- 
tising agent,  the  best  plan  is  to  begin  your  battle  with  a 
trained  captain  at  the  advertising  manager's  desk. 

THE   PAYMENT   OF   THE   AGENT 

The  commission  system  of  payment  of  the  agency  by  the 
publisher  is  believed  by  many,  including  some  agents, 
to  have  defects  which  have  grown  largely  out  of  the  change 
in  the  character  of  the  agent's  work.  If  the  agent's  service  is  ren- 
dered principally  to  the  advertiser  it  is  argued  that  it  is  not  only 
better  business,  but  also  better  common  sense,  that  the  payment 
should  come  from  him  whom  the  agent  serves.  There  are  many, 
however,  who  take  the  ground  that  the  old  system  is  safe  and 
offers  many  advantages  over  any  system  of  payment  on  the 
basis  of  the  amount  of  total  expenditure. 

As  already  stated,  a  number  of  agents  have  abandoned 
the  old  commission  method  of  payment  from  the  publishers, 
but  the  change  has  by  no  means  become  general. 

Question       John  Lee  Mahin,  president  of  the  Mahin  Adver- 

ofCom-  tising  Company,  of  Chicago,  before  the  Associated 
Advertising  Clubs  of  America  at  the  Omaha  meeting, 
made  a  short  address  in  which  he  touched  on  this  subject. 
Mr.  Mahin's  address  was,  in  part,  as  follows : 


514         ADVERTISING  AS  A  BUSINESS  FORCE 

.  .  .  .  *There  is  not  to-day  a  really  successful  institution 
which,  for  the  want  of  a  better  name,  is  called  an  advertising 
agency  that  is  operated  at  all  on  the  lines  on  which  it  was 
originally  founded. 

The  original  advertising  agent  was  a  representative  of  the 
publisher  —  the  man  who  makes  advertising  space  and  has 
it  for  sale. 

However,  the  minute  that  in  the  same  field  there  entered 
a  competitor  the  advertising  agency  at  that  moment  lost 
its  function  of  being  a  representative  of  the  publisher,  and  in 
order  to  sustain  its  own  life  and  existence  became  absolutely 
the  representative  or  the  agent  of  the  advertiser. 

In  so  far  as  the  men  conducting  advertising  agencies  feel 
or  believe  that  their  business  is  founded  on  the  fact  that  the 
publisher  pays  them  a  commission  for  their  services,  and  that 
because  of  this  fact  they  are  under  any  obligation  whatever 
to  the  publisher  that  could  in  the  slightest  degree  interfere  with 
the  absolute  service  that  they  should  render  to  the  advertiser, 
that  advertising  agency  is  on  an  unsound  basis. 

For  many  years  I  felt  that  the  publisher  paid  the  agency 
commission,  and  it  was  not  until  I  woke  up  to  the  fact  that 
both  publisher  and  advertising  agent  who  assumed  this  to 
be  true  were  working  on  a  false  basis  that  I  was  able  to  get 
the  right  sort  of  grip  on  my  own  business. 

I  was  one  of  the  men  who  thought  that  when  the  Curtis 
Publishing  Company  instituted  its  contract  agreement  with 
agents  that  this  would  be  a  benefit  to  the  business. 

It  has  been  a  benefit  to  the  advertising  business  in  so  far 
as  it  has  enabled  the  Curtis  Publishing  Company  to  give 
stability  and  strength  to  the  administration  of  its  advertising 
department.  I  cannot  figure,  however,  where  this  contract 
has  been  of  any  other  advantage  to  the  advertising  agent. 

To-day  the  publications  on  which  the  commission  is  most 
frequently  cut  are  the  contract  publications  where  the  gross 
and  the  net  rates  are  generally  known. 

An  advertising  agent  who  goes  to  the  publisher  asking  for 
protection  or  telling  him  that  he  knows  some  other  agent 
has  cut  the  commission  puts  himself  in  a  weak  position 
before  the  publisher  and  loses  his  own  confidence  and  self- 
respect. 


*Printers  Ink,  August  4,  1910,  p.  23. 


THE  ADVERTISING  AGENCY  515 

Advertising  space  can  be  bought  to-day  in  the  very  few 
pubhcations  that  rigidly  maintain  their  rates  at  the  cost  of 
sending  out  an  order  from  so-called  agents  that  rebate  all  of 
their  commission  except  enough  to  cover  this  phase  of  the 
service. 

Anything  that  the  creative  agent  secures  above  this  amount 

on   a    contract    publication  or   one-rate   publication   he   gets 

from  the  advertiser  and  solely  from  him,  and  not  in 

The       any  sense  or  by  any  process  of  reasoning  can  it  be 

Publisher  claimed  that  it  comes  from  the  publisher. 

Commis-       I  ^^  ^^^  mean  by  this  that  the  publisher  ought  to 

sions      make  the  same  rate  to  everybody,  or  that  he  ought 

to  change  his  present  system  of  making  rates. 

I  do  claim  that  at  the  present  time,  when  he  says  that  he 
pays  an  agent  commission,  he  is  in  error,  because  he  recognizes 
so  many,  and  the  competition  among  them  is  so  keen,  that  it  is 
absolutely  without  effect. 

I  am  not  telling  the  publisher  how  to  run  his  business;  I  am 
not  giving  him  any  advice. 

All  I  am  trying  to  say  to  you  to-day  is  that  all  this  talk 
about  whether  the  agent  gets  a  commission  from  the  publisher 
or  not  is  wasted  time  and  energy.  The  advertising  agent  most 
emphatically  does  not  get  a  commission  from  the  publisher, 
and  the  agency  man  who  assumes  that  he  does  is  only  weighting 
himself  with  needless  fear  and  difficulty. 

The  purchasing  power  of  the  advertising  agency  is 
largely  interfered  with  to-day  by  the  commission-giving  system. 
The  daily  paper  publisher  who  makes  a  bulk  space  price  to 
a  large  local  advertiser  forces  the  advertising  agency  that 
knows  the  situation  to  buy  space  from  the  big  local  dealer 
instead  of  going  direct  to  the  publisher. 

The  idea  that  the  recognition  by  some  organization  of 
publishers  makes  a  man  an  advertising  agent  is  responsible 
for  some  advertisers  placing  their  business  through  men  who 
do  nothing  to  create,  build  up,  or  develop  advertising  ac- 
counts. 

The  idea  that  some  advertising  agents  hold,  that  the  soliciting 
of  an  account  justifies  them  to  receive  a  commission  from  the 
publisher,  prevents  them  from  looking  after  the  advertiser's 
interests  in  such  a  way  that  they  will  make  themselves  indispen- 
sable to  him  and  thereby  make  it  unnecessary  for  them  to  talk 
or  even  think  about  asking  the  publisher  for  protection.     .     .     . 


516         ADVERTISING  AS  A  BUSINESS  FORCE 

THE   AGENTS   AND   THE   ADVERTISING   MANAGERS 

The  Association  of  National  Advertising  Managers  was 
formed  a  few  years  ago  to  take  up  some  of  the  problems  common 
to  managers,  and  among  these  problems  was  the  question  of 
the  advertiser's  relation  to  the  agency.  Some  of  the  reports 
concerning  the  work  of  the  association  led  to  rumors  of 
friction  between  this  body  and  agents  as  a  whole,  and  O.  C. 
Harn,  advertising  manager  of  the  National  Lead  Company, 
of  New  York,  and  president  of  the  association,  issued  a  state- 
ment in  which  he  undertook  to  set  out  the  objects  of  the  associa- 
tion and  its  attitude  toward  the  agency  • 

*So  many  false  statements  are  in  circulation  relative   to 
the  attitude  and  purpose  of  the  Association  of  National  Adver- 
tising Managers  in  connection  with  the  advertising 
The  Work  agency  system,  that  I  believe  a  few  words  of  fact 
Managlrs'  ^^a^^^  be  refreshing  and  illuminating. 
Association      It  has  been  variously  stated  that  the  Association 
of  National  Advertising  Managers  is  going  to  abolish 
all  agency  commissions.     That  it  has  an  axe  out  for  all  agencies. 
That  it  doesn't  believe  agencies  earn  their  salt.     That  in  a 
short  time  it  will  have  all  periodical  rates  on  a  free-for-all  flat 
basis,   equal   to   present   rates   less   the   agency   commission, 
etc.,  etc. 

The  impossibility  of  the  Association  of  National  Advertising 
Managers  accomplishing  some  of  these  things  ought  to  have 
prevented  such  purposes  being  imputed  to  the  association 
even  if  it  were  given  credit  for  desiring  to  see  them  done. 

The  general  conception  of  the  Association  of  National 
Advertising  Managers  given  by  all  this  talk  is  that  of  a  Texas 
steer  in  Tiffany's. 

What  is  the  real  attitude  of  this  big  organization  of  165  and 
more  advertising  managers  —  men  spending  twenty-five  mil- 
lions a  year  in  advertising  —  on  the  live  question  of  agency 
functions  and  performances? 

What  has  the  organization  done.? 

What  is  it  trying  to  do? 


*Pnnters'  Ink,  June  27,  1912,  p.  3. 


THE  ADVERTISING  AGENCY  517 

The  feeling  that  something  is  wrong  in  the  advertising  agency 
system  has  existed  for  several  years.  Rumblings  of  revolution 
have  been  heard  because  the  quiet  processes  of  evolution  have 
not  kept  pace  with  the  education  of  the  advertising  man. 

When  enough  advertising  men  get  to  grumbling  as  individuals 
something  is  apt  to  break  out  en  masse  when  they  get  together. 

The  Association  of  National  Advertising  Managers  is  the 
first  medium  advertising  men  have  had  for  the  expression 
of  mass  opinion.  One  of  its  early  utterances  has  been  a  protesti 
against  certain  evils  attendant  upon  the  advertising  agency 
system. 

The  big  composite  advertising  manager  for  the  first  time 
has  come  to  a  definite  conclusion  that  there  are  some  things 
he  doesn't  like  in  the  present  agency  conditions.  He  hasn't 
yet  said  what  he  is  going  to  do  about  it.  He  has  analyzed 
and  stated  the  problem  but  he  hasn't  said  he  has  the  answer. 

He  hasn't  said  he  can  find  the  answer  alone.  On  the  con- 
trary he  believes  that  publishers,  and  even  agents,  may  have 
something  to  say  and  to  do  in  the  premises. 

The  agent,  who  was  at  the  beginning  clearly  a  promoter 
for  the  publisher,  has  come  to  be  a  complex  factor.  He  takes 
a  commission  from  the  publisher  on  business  handed  out  as 
the  advertiser's  space  buyer.  The  publisher  still  looks  upon 
the  agent  as  his  man,  and  rightly,  for  the  agent  who  can  hope 
for  no  compensation  for  his  work  except  a  commission  upon 
an  order  will  produce  that  order. 

Yet  the  agent  of  to-day  claims  to  be  the  counselor  —  the 
employee,  if  you  please  —  of  the  advertiser.  Some  agents 
do  furnish  a  big  service  to  the  advertiser.  Thus  we  see  the 
agent  trying  to  serve  two  masters. 

Notwithstanding  the  fact  that  in  some  cases  the  agent  seems 
How  the  ^^  ^^  accomplishing  this  supposedly  impossible  feat 
Commis-  pretty  well,  the  fact  is  always  present,  uncomfortable 
sion  Affects  as  a  death's  head  at  a  banquet,  that  whatever  advice 
the  Agent's  i}^q  agent  may  give  his  advertiser-client,  at  bottom 
it  must  always  be:  "Spend  your  money  with  my 
other  client." 

Next  comes  the  disagreeable  knowledge  that  the  only  way 
the  agent  can  increase  his  income  is,  not  by  doing  more  for 
the  advertiser,  but  by  spendting  more  of  his  money. 

To  face  these  facts  and  acknowledge  them  is  not  to  impugn 
the  honesty  of  any  agent;  but  one  cannot  see  them  without 


518         ADVERTISING  AS  A  BUSINESS  FORCE 

questioning  the  wisdom  of  the  system  under  which  the  best 
of  agents  have  to  work.  The  association  beheves  that  true 
service  agents  would  welcome  the  discovery  of  a  practicable 
system  wherein  they  could  assume  a  logical  relationship  with 
the  advertiser.  We  admit  a  change  might  be  hard  on  the 
kind  whose  whole  idea  of  professional  service  to  the  advertiser 
is  financial  phlebotomy  —  to  relieve  that  money-congestion 
from  which  they  assume  their  patient  is  suffering. 

Not  only  does  the  present  system  necessarily  cast  suspicion 
on  the  advice  of  the  best  of  agents,  but  it  very  crudely  fits 
the  compensation  to  the  service  rendered.  The  agent  is 
undoubtedly  very  often  underpaid.  He  renders  a  service 
which  not  only  is  worth  more  to  the  client  than  the  latter  pays, 
but  which  actually  costs  more  than  the  agent's  commission 
on  the  account  amounts  to.  On  the  other  hand,  it  is  equally 
true  that  an  advertiser  often  gets  very  little  benefit  from  an 
agent  though  the  commissions  on  his  account  may  pay  the 
agent  handsomely. 

The  agent,  perhaps,  is  content  because  in  the  long  run  the 
two  kinds  of  accounts  balance  up,  but  one  can  hardly  blame 
the  second  advertiser  if  he  is  not  enthusiastic  over  the  system 
which  forces  him  to  make  up  the  deficiency ! 

The  association  asks:  Is  there  not  some  way  to  make  the 
system  less  crude  in  regard  to  method  of  compensating  the 
agent  .'* 

As  intimated  before,  all  these  things  are  being  considered 
with  an  open  mind.  No  move  to  change  existing  conditions 
will  be  recommended  until  something  better  can  be  slipped 
into  its  place. 

The  A.  N.  A.  M.  does  not  want  chaos.  It  wants  better 
conditions. 

We  need  agencies;  that  is,  we   need   some  kind  of   a   man 

or  organization  from  which  we  can  buy  advertising  service 

other  than  mere  white  space  in  periodicals  properly 

How  to    circulated.     We    need    help    in    filling    that    space, 

J^^fo^'n    in  planning  our  campaigns,  in  collating  experiences 

W'thotd  *^^  others  as  a  chart  to  steer  by;  some  of  us  may  value 
Destroying  ^^  organization  to  do  the  purely  mechanical  and 
Die  Agents  clerical  work  connected  with  the  placing  of  a  largo 
amount  of  advertising.  In  many  ways  an  organiza- 
tion of  this  kind  may  make  itself  very  useful  to  advertisers. 

Manifestly  we,  as  business  men,  are  not  going  to  lend  our 


THE  ADVERTISING  AGENCY  519 

influence  to  the  extermination  of  a  factor  in  advertising  soci- 
ety. 

It  is  quite  another  matter  to  question  the  wisdom  of  the 
system  by  which  our  agents  are  hired,  do  their  work  and  receive 
their  compensation. 

We  might  recognize  that  a  stutterer  would  be  much  more 
useful  to  us  if  he  could  talk  in  a  straight  line,  yet  we  might 
not  want  to  Oslerize  him.  An  operation  might  answer  every 
purpose. 

Likewise  we  might  like  to  see  good  agents  relieved  ot  an 
impediment  in  their  advice  without  giving  them  the  cup  of 
hemlock.  .  ,, 

The  A.  N.  A.  M.  has  adopted  its  committee's  "size-up 
of  the  situation  as  correct,  and  has  told  it  to  go  ahead  and  see 
what  can  be  done. 

I  know  that  the  committee  has  done  some  constructive  work 
since  the  Cleveland  meeting.  I  would  not  be  at  all  surprised 
if  at  an  early  date  publishers  and  agencies  reshaped  conditions 
as  the  result  of  the  friendly  offices  of  the  A.  N.  A.  M.  through 
this  committee.  Those  who  want  to  see  something  accom- 
plished should  not  lay  difficulties  in  the  way  by  making 
ridiculous  statements  of  what  is  being  attempted. 

THE   agency's   opinion    OF   ITSELF 

The  Association  of  New  York  Advertising  Agents  recently 
issued  "A  Message  to  Publishers"  in  which  it  made  one  of  the 
clearest  statements  ever  put  out  covering  the  agency's  views 
of  its  organization,  work,  methods,  and  services.  By  permis- 
sion of  the  Association  we  make  the  following  quotations  from 
the  "  Message": 

This  Association  believes  — 

That  an  Advertising  Agency  should  be  an  association  of 
specially  trained   men  having   expert   knowledge  of  merchan- 
dising   and    advertising,  who    in    composite    afford 
What  an     ^j^jg^   specialized   information   affecting   advertising 
/  gency  s    ^^^^^  ^^^  ^^  profitably  employed  in  the  organization 
of  any  one  advertiser. 

That  the  employment  of  an  Advertising  Agency  by  an 
advertiser  is  necessary  to  obtain  the  best  results  from  adver- 
tisins. 


520        ADVERTISING  AS  A  BUSINESS  FORCE 

First  —  That  he  may  benefit  by  this  speciaHzed  information. 

Second  —  That  he  may  have  an  outside  view-point  denied 
to  those  engaged  in  the  continuous  promotion  of  a  single  busi- 
ness or  kindred  businesses. 

Third  —  That  he  may  have  an  agency  do  for  him  the  various 
detailed  work  essential  to  successful  advertising,  which  work 
an  agency  can  do  better  and  more  economically. 

That  an  Advertising  Agency's  special  knowledge  of  merchan- 
dising should  embrace: 

1.  Varied  experience  in  many  markets. 

2.  Familiarity  with  merchandising  methods  in  each. 

3.  Knowledge  of  distributing  methods. 

4.  Experience  in  displaying  goods. 

5.  Acquaintance  with  kindred  problems  affecting  the  ade- 
quate depicting  of  the  product  to  be  advertised. 

That  an  Advertising  Agency's  special  experience  in  advertising 
should  embrace  knowledge  of: 

1.  The  relative  value  and  cost  of  various  advertising  media. 

2.  Methods  of  presentation  —  written  and  pictorial. 

3.  Mechanical  methods  —  including  art,  engraving  and 
printing  processes  on  the  one  hand  and  the  adaptability  of 
these  various  methods  to  particular  media  on  the  other. 

4.  Supplemental  literature  —  catalogues,  booklets,  circulars, 
displays  and  follow-up  methods. 

5.  Checking  and  billing. 

That   the   advertiser   should   safeguard   the   success   of  his 

advertising  by  examining  carefully  the  fitness  of  the  agency 

he  employs  from  the  standpoint  of  both  experience 

Safe-      and  equipment. 

^^%iT^       That  the  publisher  should  minimize  the  chance 

Advertiser  of    the    employment    of    incompetent    agencies    by 

strictly  limiting  the  recognition  of  agents  to   those 

who  demonstrate  their  fitness. 

That,  before  beginning  advertising,  the  advertiser  should 
guard  against  failure  by  insisting  on  a  thorough  acquaintance 
by  the  agent  with  merchandising  conditions  in  his  field  as  well 
as  with  his  merchandising  methods. 

That  the  agent  and  publisher  should  advise  the  advertiser 
against  advertising  without  adequate  preparation. 

That  the  advertiser  should  pay  the  necessary  expense  of  this 
preliminary  work  or  provide  for  it  in  his  advertising  appropri- 
ation. 


THE  ADVERTISING  AGENCY  521 

That  the  tripartite  relation  of  advertiser,  publisher,  and  agent 
is  necessary  to  the  economic  administration  of  advertising,  and 
that  all  three  parties  to  it  are  mutually  benefited  by  it. 

That  the  first  obhgation  of  both  pubhsher  and  agent  is  to 
make  the  advertising  profitable  to  the  advertiser. 

That  the  agency's  work  reduces  costs  to  the  pubhsher,  and 
its  compensation  by  the  pubhsher,  therefore,  is  justified  on 
an  economic  basis. 

That  the  curtailment  of  agency  service  would  decrease  the 
value  of  advertising  and  would  increase  the  price  of  white 
space  to  the  advertiser  by  forcing  publishers  to  replace  agency 
service  by  more  expensive  and  less  efficient  development  work, 
which  obviously  could  not  be  disinterested. 

That  the  agency  receives  no  compensation  in  any  sense  for 

soliciting  specific  business  for  any  one  specific  medium. 

That  the  agency  receives  its  compensation  in  the 

Agency  fQ^ni  of  a  differential  from  the  publisher  for  these, 
Compensa-  ,i  .^  ^ 

lyyfi      among  other,  specific  reasons : 

1.  For  the  service  it  renders  to  the  advertiser,  which 
increases  the  productiveness,  value,  and  continuity  of  the  adver- 
tising. 

2.  For  the  guarantee  of  accounts  —  which  in  few  other 
businesses  involves  so  great  financial  responsibility  in  proportion 
to  its  profits. 

3.  For  the  creation  and  development  of  new  business,  in 
accordance  with  the  economic  law,  which  in  every  business 
fixes  prices  to  include  the  development  expense. 

That  the  publisher  should  make  recognition  a  certificate 

of  good  business  character  and  of  financial  responsibility,  and 

an  endorsement  of  efficiency,  so  that  authorization 

Proper     ^^  j^  business  may  rest  on  a  sound  basis. 
Recognition      That,  having  granted  recognition  to  the  agent,  and 
endorsed  him  as  qualified  to  render  service  to  the 
advertiser,  the  publisher  has  a  right  to  investigate  the  quality 
of  the  service  rendered. 

(This  declaration  is  made  with  the  specific  reservation  that 
the  publisher,  being  interested,  may  not  properly  be  judge 
of  the  media  used.) 

That  the  right  of  the  publisher  to  investigate  service  entails 
the  obligation  to  see  that  service  is  rendered. 

That  the  publisher  owes  it  to  the  advertiser  and  to  such 
agents  as  live  up  to  their  obligations  to  advertiser  and  publisher 


522        ADVERTISING  AS  A  BUSINESS  FORCE 

to  limit  or  withdraw  recognition  from  those  agents  who  do  not 
live  up  to  these  obligations. 

That  the  publisher  should  determine  the  right  of  an  agent 
to  continued  recognition  on  the  basis  of  the  adequacy  of  the 
service  rendered  to  the  advertiser. 

That  the  publisher  should  make  public  the  names  of  all 
enfranchised  by  them,  and  that  no  diflPerential  be  allowed  to 
others  than  those  whose  names  are  so  published. 

The  point  of  view  of  the  publisher  has  been  outlined  in  a 
letter,  sent  in  response  to  this  "message"  of  the  agents,  by 
Herbert  S.  Houston  of  Doubleday,  Page  &  Company,  In  a 
letter  to  William  H.  Johns,  the  President  of  the  New  York 
Advertising  Agents'  Association,  he  says: 

THE   publisher's   POINT   OF   VIEW 

Your  Association  has  rendered  a  great  service  to  the  cause 
of  advertising  by  defining  with  a  clearness  and  fairness  never 
before  attained,  in  my  judgment,  the  scope  and  function  of  an 
advertising  agency. 

The  thing  in  particular  that  impresses  me  in  this  "message," 
besides  its  clearness  and  fairness,  is  its  attitude  of  calm  dignity 
—  a  sort  of  poised  and  assured  confidence.  This  is  just  as  it 
should  be;  for  far  too  long  the  impression  has  gone  abroad  that 
the  agent  was  some  sort  of  commercial  mongrel,  part  scalper, 
part  broker,  and  altogether  an  interloper  in  the  process  of 
advertising.  You  have  magnified  and  interpreted  the  con- 
structive quality  of  the  agent's  office  and  in  so  doing  you  have 
made  the  whole  business  of  advertising  your  debtor. 

As  a  publisher  I  wish  to  endorse  heartily  the  ground  on  which 

you  have  rested  the  publisher's  reason  for  allowing  the  agent's 

The  Reason  commission.     In  the  last  analysis  that  reason  is  an 

for  the      economic  one  —  the  agent's   commission,   from    the 

Agent's  publisher's  standpoint,  is  primarily  a  selling  ex- 
Commission  pg^se.  Of  course  this  selling  expense  must  be  borne 
by  the  advertisers  just  as  their  selling  expense  is  borne  by  their 
patrons  and  customers.  It  is  clearly  to  their  interest,  therefore, 
to  have  this  selling  expense  kept  as  low  as  possible.  And  the 
present  agency  system,  in  my  judgment,  keeps  it  at  a  much 
lower  figure  than  would  be  possible  if  the  development  work  now 


THE  ADVERTISING  AGENCY  523 

done  by  agents  were  undertaken  by  publishers  themselves. 
This  is  an  age  of  concentration  and  co-operation.  The  agency 
is  a  concentrated  form  of  selling  which  represents  all  pub- 
lishers co-operatively,  thus  embodying  two  of  the  greatest  forces 
in  modern  industry  and  commerce.  Manifestly,  if  publishers 
should  undertake  to  supplant  the  work  of  the  agency,  they 
would  have  to  follow  the  principle  of  distribution  of  selling 
activity  instead  of  concentration  and  of  individual  action 
instead  of  co-operation;  and  there  can  be  no  doubt  but  that 
the  change  would  result  in  greatly  increased  selling  expense, 
which  would  mean,  of  course,  an  increased  cost  of  advertising 
to  the  advertiser. 

But  your  "message"  not  only  makes  a  sound  definition; 
it  also  sets  up  a  high  standard  to  which  agents  and  publishers 
should  measure  up,  in  the  interest  of  the  advertiser,  whom  both 
of  us  serve.  There  is  an  old  proverb  that  "the  way  to  have 
good  neighbors  is  to  be  one";  and  it  is  certainly  true  that 
"the  way  to  have  good  agents  is  to  be  one,"  and  equally  true 
that  "the  way  to  have  good  publishers  is  to  be  one." 

Now  I  believe  that  practically  all  publishers  maintain  their 
rates.  But  I  do  not  believe  that  practically  all  agents  main- 
tain their  full  commission  rates.  The  "differential," 
The  Main-  ^rhich  the  publisher  allows  as  a  measure  of  the  com- 
oj  Rates  niission,  has  a  way,  at  times,  of  becoming  divided, 
sometimes  with  the  advertiser  and  sometimes  with 
an  unrecognized  agent.  As  long  as  this  continues,  advertisers 
will  have  ground  for  urging  on  publishers,  as  some  of  them  are 
doing  now,  that  they  should  permit  the  advertiser  and  the  agent 
to  agree  on  the  amount  of  the  commission;  they  say  that  such 
a  plan  would  give  the  necessary  elasticity  in  the  commission 
so  that  it  could  be  made  to  measure  the  exact  service  rendered 
to  the  advertiser  in  every  case.  In  theory  this  appears  sound 
at  first,  but  it  will  not  bear  analysis.  The  reason  is,  it  considers 
only  the  advertiser  and  the  agent  and  omits  the  publisher 
entirely.  The  publisher,  like  every  other  manufacturer, 
must  put  his  advertising  selling  expense  on  his  advertising 
sales.  These  sales  are  made  to  advertisers,  through  agents 
who  represent  publishers  collectively,  and  the  selling  expense, 
following  universal  commercial  practice,  must  be  borne  by 
advertisers.  Until,  therefore,  a  more  economical  and  effective 
way  of  meeting  this  selling  expense  than  the  present  one  can 
be  found,  the  agency  system  will  remain.       And  your  Associa- 


524        ADVERTISING  AS  A  BUSINESS  FORCE 

tion  is  helping  the  advertiser  as  well  as  the  publisher  by  issuing 
this  admirable  "message"  with  its  common  sense  and  its  un- 
common and  straight  forward  fairness. 

THE  FUTURE  OF  THE  AGENCY 

On  July  20,  1911,  Printers'  Ink  published  a  list  of  eighteen 
"fundamental  questions"  concerning  the  advertising  business 
and  its  probable  future  development.  Among  these  questions 
were  the  following: 

Will  the  advertising  agency  develop  in  the  direction  of  selling 
organization's  working  direct  with  the  dealer  to  establish  dis- 
tribution and  foster  a  more  efficient  handling  of  advertised 
goods,  or  will  it  avoid  that  responsibility? 

In  reply  to  this  question  a  number  of  letters  were  received, 
among  which  was  the  following  written  by  Frank  Markward, 
advertising  manager  of  William  Volker  &  Company,  makers 
of  window  shades,  in  Kansas  City,  Mo. 

*The  eighteen  "Fundamental  Questions"  concerning  adver- 
tising, propounded  in  the  July  20th  issue  of    Printers'  Ink 
should    inspire    considerable    thoughtful  cogitation. 
The       The  first  one  is  especially  interesting  to  me,  as  it 
Effects  of  touches  my  pet  belief  in  a    future  development  of 
to^the^    distribution  on  the  part  of  the  manufacturer  with 
Retailers   an  outlet  through  retail  stores. 

If  it  were  to  be  said  that,  to  a  considerable  extent, 
advertising  checked  merchandise  distribution,  it  would  be 
looked  upon  as  revolutionary  if  not  traitorous.  And  yet 
I  believe  it  is  true,  and  I  want  to  explain  why  I  have  this  con- 
viction. 

Nearly  every  manufacturer  whose  product  is  known  and 
sold  the  country  over  has  an  active  advertising  department, 
a  part  of  whose  duties  is  to  furnish  as  many  selling  helps  to 
the  retailer  as  it  is  thought  he  can  assimilate. 

Now,  in  every  line  there  are  a  number  of  products  sold 
through  the  same  kind  of  retail  stores  —  drygoods,  hardware, 
drugs,    furniture,    and   others.     The    retailer    receives   these 

*Printers'  Ink,  August  31,  1910,  p.  30. 


THE  ADVERTISING  AGENCY  525 

various  selling  plans  from  ten  to  thirty  or  more  producers  of 
nationalized  products.  These  trade  helps  are  all  designed  to 
increase  the  sales  of  each  manufacturer's  goods.  Some  of  them 
very  frankly  exploit  the  merits  of  the  manufacturer's  merchan- 
dise. Others  say  something  for  the  dealer's  general  lines  as 
well  as  the  one  the  producer  has  so  keen  an  interest  in. 

In  addition  to  the  usual  magazine,  newspaper,  street-car, 
and  outdoor  advertising,  there  comes  to  the  dealer  a  deluge 
of  booklets,  circulars,  folders,  show  cards,  window  display 
suggestions,  exhibition  stunts,  demonstrations,  special  cam- 
paigns, and  the  trade  paper. 

But  of  that  kind  of  advertising  sent  to  the  dealer  to  be  used 
by  him  there  is  a  veritable  degree,  and  the  quantity  makes 
it  lose  effectiveness  and  really  retard  sales  by  reason  of  its 
prolific  quantity.  As  a  matter  of  direct  test  and  personal 
experience,  I  believe  this  statement  is  well  founded.  This 
direct-to-dealer  advertising  is  also  pretty  even  in  quality. 
Should  one  manufacturer's  advertising  department  evolve  a 
plan  more  potent  than  its  nearest  rival's  it  remains  superior 
but  a  short  time.  Soon  after  being  sent  to  the  retailer  it 
also  goes  to  the  competitor  who  immediately  endeavors  to 
make  a  better  one. 

Advertising  departments  are  humanly  governed  and  the 
reward  of  results  is  not  exclusively  confined  to  one.  The  work 
serves  to  educate  the  dealer  but  so  much  more  is  offered  than 
is  utilized  that  the  waste  is  prodigious. 

And  this  great  outpouring  of  aid  makes  the  dealer  indifferent. 
It  costs  him  little  or  nothing  and  comes  so  easy  that  his  appre- 
ciation is  altogether  too  limited  to  insure  equity. 

The  solution  of  the  problem  lies  largely  in  that  fact  that 
retail  dealers  are  not  as  a  rule  conversant  with  merchandise 
values.  Comparatively  few  realize  their  position  in  the  social 
and  domestic  life  of  their  communities  —  or  rather  what 
their  position  should  be.  And  because  of  this  condition  there 
is  room  for  a  new  business  factor  —  the  retail  expert. 

From  the  general  experience  of  direct-to-dealer  advertising 

it  would  seem  that  the  advertising    agency    must  devise   a 

different  method    from  that    now    used,    if    better 

M^rd    ^^'^  larger  results  are  to  be  shown.     Inducing  the 

Needed  merchant  to  handle  more  advertised  goods  will  of 
course  be  done,  but  there  is  one  undermining  force 
against  the  success  of  this  plan  —  imitations. 


526        ADVERTISING  AS  A  BUSINESS  FORCE 

For  instance,  there  may  be  exploited  a  product  of  surpassing 
excellence.  It  is  widely  advertised  and  secures  a  large  sale. 
Then  comes  from  one  to  twenty  imitations.  In  these  sub- 
stitutes the  value  and  appearance  of  the  original  is  aimed  at 
and  intentionally  missed.  The  first  imitation  shades  quality 
just  enough  to  make  the  under-selling  price  an  object  to  the 
dealer.  It  looks  to  be  almost  as  good.  The  next  cuts  the 
quality  and  price  deeper  and  so  it  goes  on. 

Now,  if  the  dealer  really  knew  merchandise  he  would 
not  do  this  —  so  one  might  think.  But  don't  lean  very 
heavily  on  this  belief.  It  is  shaky.  The  dealer's  objection 
to  advertised  merchandise  is  that  he  is  unable  to  secure 
as  much  profit  as  he  thinks  he  should  have.  The  fact 
that  the  goods  are  easier  to  sell  is  no  overburdening 
proof  to  his  mind.  Wherefore,  he  puts  the  substitute  in  stock 
and  sells  it. 

It  is  surely  going  to  require  a  potent  brand  of  effort  to  make 
the  dealer  see  the  error  of  his  ways.  To  accomplish  this  per- 
sonal contact  is  necessary. 

This  really  demands  a  new  profession.  The  national  adver- 
tising now  being  used  will  doubtless  improve  in  clarity  of 
expression,  a  bettered  persuasiveness,  more  artistic  typo- 
graphical and  illustrative  appearance,  and  to  some  extent  an 
increased  percentage  of  results;  but  this  avenue  is  open  to  all, 
if  to  one,  and  a  level  of  helpfulness  will  again  prevail. 

What  is  needed  is  a  retail  expert.  And  right  there  is  a  rock 
for  the  agency  boat.  An  agency  with  a  large  number  of 
accounts,  including  a  dozen  or  more  lines,  all  seeking  national 
distribution  and  operating  through  practically  all  kinds  of 
retail  stores,  would  require  a  man  in  each  line,  except  instead 
of  one  man  it  might  require  a  dozen  to  do  the  work  of  calling 
upon  the  merchant  in  person  and  remaining  with  him  long 
enough  to  start  him  on  the  new  merchandising  route.  It 
would  prove  a  very  difficult  matter  to  secure  the  men  in  the 
first  place.  It  would  be  mighty  expensive  in  the  second,  and 
there  is  considerable  doubt  if  the  manufacturer  would  consent 
to  be  represented  through  an  agency  anyhow. 

If  the  agency  is  to  evolve  as  the  selling  organization  of  the 
line  it  represents  in  advertising,  it  would  appear  that  it  must 
specialize  upon  some  particular  industry.  No  general  agency 
with  a  multiplicity  of  merchandise  accounts  could  profitably 
take  up  the  work  of  personal  education. 


THE  ADVERTISING  AGENCY  527 

To  illustrate  this  point  more  clearly,  take  an  industry  that 
deals  with  the  retail  furniture  merchant.  The  retail  expert 
would  have  to  combine  knowledge  and  experience  such  as 
a  friend  of  mine  who  is  an  expert  in  the  retail  furniture  business. 
As  a  boy  he  worked  in  a  furniture  factory,  mastering  the  relative 
values  of  construction,  wood,  and  finish,  the  importance  of  good 
lines  and  pattern  design,  period  styles,  etc.  Then  he  took  up  the 
work  of  upholstering,  learning,  by  actual  experience,  the  methods 
of  the  work,  the  fabric  qualities,  and  the  resultant  durability  of 
the  varying  methods  employed  on  medium  to  high  grade  work. 

Then  the  retail  furniture  business  claimed  him,  where  he 

learned   more    of    furniture    and    kindred    home    furnishings. 

His  taste    developed,   the   value    of    stock    arrange- 

What  the  ment  as  an  aid  to  sales  appealed  to  him  and  little 
"Evverf  ^^  little  the  small  city  store  grew  in  the  attractive 
Could  Do  qualities.     The  relationship  between  the  store  and 
the  domestic  hearths  of  the  entire  community  engaged 
his  effort,  and  as  he  continued  to  develop  he  outgrew  the  limited 
field  of  his  town  and  came  to  a  larger  city.     In  the  years  that 
have  passed  he  has  steadily  kept  on  growing.     His  view-point 
has  enlarged,  his  activities  increased.     He  has  become  a  sales- 
man of  the  master  class,  a  buyer  of  judgment,  and  the  store 
that  is  the  scene  of  his  efforts  holds  enthralling  interest  for 
the  homemaker. 

With  his  eminently  practical  knowledge  of  merchandise 
and  merchandising  and  his  sympathetic  insight  into  the  needs 
of  the  retail  furniture  merchant,  he  would  prove  a  momentous 
element  in  improving  the  business  of  the  manufacturer  whose 
goods  were  nationalized  or  aimed  at  that  classification.  He 
would  give  more  ideas  to  the  merchant,  show  him  in  its  most 
appealing  guise  the  position  the  home-furnishing  merchant 
should  occupy  in  his  locality  and  start  him  well  toward  that 
position.  He  would  give  him  inspiration,  wake  him  up  to 
the  possibilities  of  his  business,  and  visualize  the  policy  and 
methods  that  spell  success  as  the  result  of  such  efforts. 

And  this  same  example  of  efficiency  applies  directly  to  every 
other  retail  merchandise  business.  It  may  be  that  the  adver- 
tising agency  could  secure  such  men,  but  the  real  market  for 
such  services  seems  to  lie  with  the  manufacturer  alone.  For 
him  the  retail  expert  would  be  a  godsend. 

And  so  I  conclude  that  the  agency  will  not  "develop  in  the 
direction  of  selling  organization,  working  direct  with  the  dealer," 


528        AD\^RTISING  AS  A  BUSINESS  FORCE 

at  least  not  along  the  line  described  here,  and  it  is  along  this 
line  that  more  efficient  and  more  successful  co-operation  will 
necessarily  be  produced. 

The  problems  of  the  modern  agency  and  some  of  the  most 
important  questions  connected  with  the  relations  between 
the  agency  and  the  advertiser  are  clearly  discussed  under  the 
title:  "What  Agents'  'Higher  Cost  of  Living'  Is  Leading  To," 
by  "A  man  of  long  agency  experience  who  has  been  making 
an  independent  investigation  of  agency  conditions." 

Service,  genuine  and  valuable  service,  rendered  by  the 
agent  to  the  advertiser  is  shown  by  this  discussion  to  be  the 
final  standard  by  which  the  agency  and  Its  work  are  to  be 
measured.  The  agency,  of  whatever  form,  which  can  render 
this  will  live.  All  others  are  passing  more  or  less  rapidly. 
Even  the  method  of  payment  and  the  amount  shrink  in  impor- 
tance, beside  the  searching  question:    Does  the  agency  serve? 

*"The  cost  of  rendering  agency  service  is  exactly  double 
to-day  what  it  was  six  or  seven  years  ago,"  says  a  well-known 
agency  man. 
The  "jf  {I  were  not  for  accounts  on  which  we  do  little 

Aaen^    except  to  'place'  the  business,"  says  another  prom- 

Costs      inent  agent,  "I  could  not  afford  to  render  the  service 
I  do  on  other  accounts.     In  other  words,  what  service 
I  render  is  being  partly  paid  for  by  my  clients  who  do  not  ask  or 
get  service." 

Two  statements  like  this  strike  instantly  into  the  heart  of 
the  problem  of  modern  agency  service  from  the  very  real 
view-point  of  the  agent  himself.  For  the  last  six  years  the  cost 
of  everything  connected  with  agency  service  has  risen  steadily 
and  has  slowly  nibbled  away  at  the  legitimate  profits  of  the 
legitimate  agent.  More  than  that,  the  demand  from  adver- 
tisers for  greatly  increased  and  more  complicated  kinds  of 
service  has  been  growing  apace  all  this  time. 

In  accepting  an  invitation  from  Printers'  Ink  to  talk  about 
present  agency  conditions,  I  appreciate  that  I  am  asked  to 
deal  with  the  most  delicate  situation  in  the  entire  advertising 

*Pnniers'  Ink,  December,  1910,  p.  3. 


THE  ADVERTISING  AGENCY  529 

world.  Yet  it  seems  to  mc  that  there  is  some  good  to  be 
accomphshed  by  a  frank  talk  about  the  existing  conditions 
and  the  currents  and  counter-currents  that  meet  in  an  agent's 
office.  In  the  first  place,  I  want  it  distinctly  understood 
that  I  have  no  general  "panacea"  to  propose,  and  that  the 
various  plans  for  summarily  dropping  the  agent's  commis- 
sion and  substituting  direct  payment  by  the  advertiser 
are  not,  in  my  opinion,  practical  nor  are  we  likely  to  see  any 
radical  overturning  of  the  present  system,  at  least  for  years 
to  come. 

The  good,  therefore,  that  I  think  can  be  accomplished  is 
in  the  direction  of  having  advertisers  obtain  a  better  under- 
standing of  agency  organization,  why  one  agent  is  cheap  at 
15  per  cent,  and  another  dear  at  5  five  per  cent,  and,  in  particu- 
lar, that  inasmuch  as  the  agent's  remuneration  in  the  final 
analysis  comes  out  of  the  advertiser's  pocket  rather  than  of 
the  publisher,  it  is  up  to  the  advertiser  himself  to  see  that 
he  secures  his  quid  pro  quo  — •  in  other  words,  to  distinguish 
sharply  between  agents  who  are  in  position  to  render  valuable 
service  and  the  much  larger  number  of  agents  ("recognized" 
even  though  they  may  be)  whose  advice  is  of  doubtful 
soundness  and  whose  physical  equipment  is  such  that  real 
service  could  not  be  forthcoming  even  were  their  intentions  of 
the  best. 

Over  a  long  period  of  years,  the  advertising  agency  has  been 
gradually  evolving  from  a  purely  brokerage  office  to  a  profes- 
sional   relation    with    its    clients.      It  is  related  of 
The  Pro-  Joseph   Choate  that  he  was   once  called   upon  by 
^^^°^     the  board  of  directors  of  a  great  corporation.     They 

of  the     asked  him  a  certain  question  relating  to  a  proposed 

Agency  plan  of  financing.  All  that  they  wanted  was  a 
simple  yes  or  no.  The  famous  lawyer  closed  his 
eyes  in  silent  thought  for  ten  minutes  and  then  gave  them 
their  answer  for  which  they  were  glad  to  pay  him  a  fee  of 
$50,000.  Yet  any  number  of  lawyers  would  have  jumped 
at  the  chance  to  give  an  opinion  for  $100.  Millions  were 
involved  in  the  decision,  and  the  corporation  directors  wanted 
the  ablest  and  ripest  judgment  possible  on  their  problem. 

And  the  point  is  they  were  willing  to  pay  for  it. 

There  is  a  clear  analogy  here  to  the  advertising  agent.  The 
advertiser  who  is  going  to  spend  $5,000,  $50,000  or  $500,000 
needs  not  merely  advice  and  help,  but  the  best  advice  and  help 


530        ADVERTISING  AS  A  BUSINESS  FORCE 

obtainable.  Lots  of  alleged  experts  and  agents  are  clamoring 
for  the  account.  The  question  is,  What  have  they  back  of  them 
in  actual  accomplishments,  in  experience,  in  ripeness  of  judg- 
ment and  all-around  ability.'' 

So  I  think  every  advertiser  and  every  advertising  man  owes 
it  to  himself  and  the  cause  of  good  advertising  in  general  to 
look  below  the  surface  and  investigate  carefully  the  conditions 
which  are  raising  the  cost  of  agency  service. 

A  large  and  famous  Middle- Western    advertising  account 

changed  hands  some  weeks  ago,  and  the  soiree  of  claim  and 

counter-claim,  bluff  and  counter-bluff  on  the   part 

^^^       of  some  agents  seeking  this  account,  was  a  sight  to 

/oT^Mc-   behold.     The   agents   who   were   "in   the   running" 

counts"  were  all  known  to  have  big  organizations  and  to 
have  important  acknowledged  successes  to  their 
credit.  Consequently  the  final  basis  of  the  competition 
simmered  down  to  the  extra  measures  of  service  they  promised 
to  perform.  As  fast  as  one  agent  would  claim  that  his  "trade 
aid  department"  would  work  hand  in  hand  with  the  client's 
selling  organization  in  working  out  sales  problems,  another 
agent  would  point  to  his  districted  organization  and  promise 
that  reports  from  resident  staff  men  on  the  field  could  be 
furnished.  Then  another  agent  would  go  the  whole  kit  one 
better  by  promising  to  scatter  a  whole  staff  of  special  traveling 
men  throughout  the  country  to  give  special  trade  reports. 
And  so  the  merry  game  went  on.  Hardly  had  one  agent 
thought  he  had  the  account  "cinched"  when  he  would  wake 
up  the  next  morning  to  find  that  the  president  of  the  company 
had  been  rushed  to  New  York  on  the  Twentieth  Century 
Limited  to  look  over  another  agency  and  get  a  new  view-point 
of  agency  service. 

The  outcome  of  this  little  game  is  not  at  all  important,  for 
an  internal  situation  later  decided  who  was  temporarily  to 
get  the  account.  As  a  matter  of  fact,  there  were  few  degrees 
of  difference  between  many  of  the  agents,  and  one  of  them 
formerly  gave  notice  of  withdrawal  from  solicitation  in  the 
middle  of  the  excitement  because  he  felt  the  pace  was  getting 
too  fast  for  safety  and  sense. 

The  point  is  that  in  the  selection  of  an  agency  for  this  account, 
as  in  many  others  nowadays,  many  more  factors  than  art  and 
copy  equipment  enter  into  the  case.  As  a  consequence,  a 
distinctly  universal  tendency  is  observable  among  agents  to 


THE  ADVERTISING  AGENCY  531 

build  up  more  effective  (or  at  least  more  plausibly  effective) 
departments  of  trade  investigation,  selling  assistance,  and  other 
methods  of  more  practically  dovetailing  the  advertising  with 
trade  and  sales  conditions. 

But  see  where  all  this  is  bringing  the  cost  sheets  of  agency 
service!  A  more  costly  thing  than  trade  investigation,  sales 
assistance  departments,  etc.,  could  scarcely  be  devised.  Such 
work  is  above  the  level  of  intelligence  of  ordinarily  well-paid 
salesmen,  and  those  who  have  had  no  sales  training  are  weak 
reeds  upon  which  to  lean.  You  can  write  copy  out  of  your 
head,  but  you  have  got  to  be  on  the  spot  and  observe  with 
particularly  minute  optics  to  learn  what  is  going  on  in  trade 
circles  that  is  of  strategic  or  basic  value. 

Therefore,  agency  costs  are  creeping  up  at  an  uncompromis- 
ing rate,  until  some  interesting  things  are  happening.  The 
large  advertiser,  who  has  been  able  to  place  his  business  at 
a  pretty  generously  cut  rate,  is  frequently  finding  either  that 
he  cannot  place  it  at  as  low  a  rate  as  before,  or  else  that  the 
service  he  is  getting  is  inferior.  If  it  is  neither  of  these  things, 
then,  to  tell  the  plain  truth,  the  agent  is  concentrating  his 
genius,  not  upon  giving  his  client  service,  but  upon  devising 
various  and  dubious  ways  and  means  to  cut  the  publisher's 
rates  so  as  to  make  a  profit,  or  make  him  support  a  profitable 
house-organ.  If  all  the  energy  that  has  been  spent  in  figuring 
out  ways  to  beat  this  increasingly  difiicult  combination  were 
spent  upon  earnestly  developing  the  client's  business,  there 
would  be  many  more  interesting  accounts  in  the  field  to-day. 
The  "increased  cost  of  living"  to  agents  is  drawing  the  line 
still  more  sharjily  between  the  agent  who  gives  careful,  honest 
service  and  the  agent  who  is  merely  squeezing  lemons  for  profit 
in  what  fearful  and  wonderful  ways  he  can. 

The  one  who  is  being  caught  between  the  upper  and  nether 

millstones  of  this  situation  is  the  smaller  advertiser.     There  is 

more  than  one  agent  with  an  expensive  service  depart- 

The       nient  who  refuses  to  accept  an  account  totalling  less 

Advertiser  ^^^^  $10,000  a  year.    In  fact,  many  accounts,  amount- 

Suffers  ing  to  but  a  few  thousand  because  of  peculiar  trade 
conditions  and  because  of  necessarily  slow  growth, 
actually  go  a-begging  among  some  of  the  larger  agents,  because 
such  agents  frankly  tell  them  they  cannot  afford  to  handle 
their  business.  One  such  advertiser  not  long  ago,  on  being  told 
this,  promptly  offered  to  double  the  commission,  a  total  of  30 


532       ADVERTISING  AS  A  BUSINESS  FORCE 

per  cent.,  and  his  account  was  even  then  accepted  with  no 
very  great  alacrity. 

Now  throughout  this  country  there  are  to-day  thousands 
of  fairly  sizable  concerns  which  are  prospective  advertisers  of 
the  livest  kind.  The  comprehension  of  advertising's  impor- 
tance, as  well  as  the  development  of  method,  has  been  growing 
apace  in  the  last  ten  years  and  has  percolated  into  many  unsus- 
pected nooks  and  crannies  of  business.  Many  manufacturers, 
of  whom  the  brightest  agency  solicitor  dreameth  not,  are  to-day 
getting  ready  for  a  sensible  campaign,  and  one  fine  day  soon 
they  will  be  in  just  the  right  position  to  advertise  in  consumer 
periodicals.  Most  of  them  are  doing  some  kind  of  advertising 
now,  and  numbers  who  are  ready  for  periodical  advertising 
are  showing  their  heads  every  month.  Yet  their  accounts 
may  not  and  should  not  now  total  more  than  from  $3,000  to 
$10,000  at  the  start.  Nevertheless,  their  start  is  more  impor- 
tant and  complex  than  their  finish.  The  new  advertiser  has 
many  more  serious  problems  to  meet  than  the  established 
one.  The  very  adoption  of  policies  in  line  with  more  mod- 
ern advertising  and  selling  methods  (even  though  dealer 
work,  trade-paper  advertising,  and  form  letters  are  the  only 
reasonable  avenues  of  advertising  at  present)  make  such  ad- 
vertisers need  the  best  advertising  service  most  keenly  of 
all  advertisers. 

The  country  is  full  of  such  cases,  and  the  agents  of  strength 
and  capability  are  carrying  some  such  accounts  at  ridiculously 
low  profit.  Other  agents  are  without  scruples  and  are  exploit- 
ing them,  while  the  remainder  of  such  small  advertisers  are 
being  taken  care  of  with  a  greater  or  less  degree  of  efficiency 
by  the  numerous  small  agents  throughout  the  country.  This 
situation  has  created  a  peculiar  anomaly  in  the  fact  that  while 
large  agents  are  deploring  the  rapid  multiplication  of  the  small 
agents,  many  of  whom  are  irresponsible,  some  agents  them- 
selves foster  such  conditions  by  either  refusing  or  giving  scant 
attention  to  the  accounts  which  furnish  the  grist  for  these 
small  agents.  Another  peculiar  factor  at  work  is  that  represen- 
tatives of  publications  who  work  up  an  account  and  feel  afraid 
that  if  they  turn  it  over  to  an  agency  of  strong  standing  they 
will  not  get  an  order,  turn  to  a  smaller  agent  with  less  ability 
but  more  gratitude !     This  feeds  the  small  agent,  too. 

The  evils  of  the  increasing  cost  of  living  to  agents  are,  liow- 
however,  not  yet  all  tabulated.     The  wide  variance  between 


THE  ADVERTISING  AGENCY  533 

the  cost  of  handling  a  magazine  and  newspaper  advertising 
campaign  has  led  to  a  lax  and  dangerous  situation.  Some 
conscientious  agents  frankly  admit  that  it  is  both 
The  Selec-  j^ore  profitable  and  more  pleasant  to  steer  an  adver- 
Mediums  tiser  into  magazines,  and  that  they  frequently  delib- 
erately waive  some  of  the  excellent  reasons  why  a 
particular  client  should  go  into  the  newspapers.  Even  the 
magazine  men  themselves  do  not  approve  of  such  discrimina- 
tion, for  when  the  campaign  turns  out  to  be  a  failure  the  medium 
has  to  share  the  blame.  The  comparatively  few  agents  who  do 
place  their  clients'  interests  absolutely  above  everything  else 
unquestionably  are  doing  so  at  a  greater  fiinancial  discrimination 
against  themselves  than  is  proper  to  tempt  any  professional 
service  with.  It  is  so  easy  to  select  six  or  a  dozen  magazines, 
prepare  a  standard  size  ad  from  which  absolute  duplicates 
can  be  made,  and  thereby  make  from  three  hundred  to  a  thou- 
sand dollars  commission  with  a  very  minimum  expense,  as 
contrasted  with  the  greatly  increased  cost  of  preparing,  mailing, 
and  checking  a  campaign  in  newspapers  totalling  the  same 
amount  in  dollars  and  cents. 

Further  than  this,  the  policies  of  many  newspapers  have 
made  the  incentive  still  greater  in  favor  of  the  magazines. 
For  instance,  an  agency  handling  a  magazine  account  some 
time  ago  persuaded  the  advertiser  to  consider  newspapers  and 
prepared  tentative  proofs  of  ads,  which  were  submitted  with 
estimates  and  schedules.  Nothing  more  was  heard  from  the 
matter  until  the  checking  department  one  day  came  across 
one  of  these  tentative  ads  published  in  a  newspaper!  On 
investigation  it  was  found  that  the  advertiser  had  secured 
rates  for  placing  direct  from  the  same  list  of  newspapers  sug- 
gested, with  the  result  that  enough  publishers  cut  the  agency's 
rates  by  allowing  commission  direct  to  influence  them  to  ignore 
the  agent  and  save  money!  "Why  should  I  worry  my  head 
off  to  develop  this  advertiser  into  using  newspapers,"  indig- 
nantly remarked  this  agent,  "when  such  a  publisher  absolutely 
refuses  to  stand  by  me  as  an  agent  and  compels  me  to  charge 
up  honest  work  to  profit  and  loss?  " 

If  all  advertisers,  large  and  small,  paid  the  full  15  per  cent, 
service  rate  to  agents,  matters  would  mend  themselves  rapidly. 
Fifteen  per  cent.,  even  though  being  closely  encroached  upon 
by  the  peculiarly  expensive  new  demands  of  advertisers  for 
trade  and  sales  service,  carries  a  living  profit.     The  following 


534       ADVERTISING  AS   A  BUSINESS  FORCE 

is  a  tabulation  of  agency  cost  in  one  of  the  largest  agencies 
in  the  country. 

Solicitation  (commissions,  management,  promotion  work,  preliminary 

sketches,  etc.) 5  % 

Overhead  (copy  staff,  officers'  salaries,  rent,  travel,  art  department, 

agency  literatm-e) 6  % 

Clerical  (forwarding,  checking,  etc.) 2^% 

Profit  (in  which  loss  must  be  figured  also) 1^% 

Total 15  % 

Many   advertisers  have   not  fully   realized  just  what  was 
behind  an  agency.     There  has   been   a  rather  common  but 
vague  general  impression  of  a  superfluity  of  high-grade  orna- 
ment,   unctuous    personality,  and    a    secluded    "high-brow" 
department  recruited  from  a  rather  plentiful  and  fairly  cheap 
market.     Nevertheless,  from  a  strictly  business  point  of  view, 
an  advertising  agency  of  size  is  a  peculiarly  intricate  and  high- 
pitched  business  organization.     The  most  trying  thing  in  the 
world  is  to  analyze,  lay  out,  and  manufacture  advertising  that 
will  not  only  fit  conditions  rightly,  but  please  the  powers  that  be, 
There  is  one  large  account  in  New  York  composed  of  two 
concerns   whose   sales   forces  work  together,   the    advertising 
manager  of  which  must  first  be   satisfied,   then    an 
Pleasing   advertising  committee  of  the  other  company.     It  is 
"Powers   ^  back-breaking  and  expensive  job  to  get  copy  past 
That  Be"  this  formidable  wall,  which  hides  unexpected  idiosyn- 
cratic spearpoints  at  every  angle.      It  is  a  fact  that 
more  copy  is  designed,  written,  and  printed,  but  which  never 
gets  further,  than  ever  is  published  and  used. 

As  good  agencies  and  good  agency  men  have  grown  in  busi- 
ness experience  with  many  kinds  of  selling  problems,  their 
advice  on  matters  of  business  promotion  and  policy  has  become 
worth  a  lot  of  money.  In  fact,  I  have  struck  more  than  one 
large  advertiser  who  admitted  that  his  agency  was  poorly 
equipped  in  many  respects,  and  some  even  who  admitted  that 
they  were  not  at  all  certain  their  agencies  were  "straight" 
about  rates,  etc.  But  they  all  did  emphasize  the  fact  that 
their  general  selling  advice  was  worth  a  great  deal. 

A  certain  large  advertiser  says  that  he  is  in  the  habit  of 
"running  over"  to  his  agent  two  or  three  times  a  week  to  talk 
over  questions  of  policy  and  promotion,  many  not  at  all  closely 
connected  with  advertising.  He  frequently  sits  in  the  agent's 
office  a  whole  afternoon  discussing  such  matters.     One  day  he 


THE  ADVERTISING  AGENCY  535 

brought  with  him  an  advertiser  who  was  visiting  in  town. 
He  was  an  unintentional  hstener  to  a  minor  discussion  of  this 
nature.  "/  never  got  that  kind  of  service  from  my  agent," 
was  his  comment  later;  "I  didn't  know  an  advertising  agent 
could  be  profitably  let  in  on  such  a  problem." 

"Z  pay  that  agent  15  per  cent.,"  said  the  advertising 
manager  significantly  (knowing  that  his  friend  paid  but  10), 
"and  I  consider  it  cheap  at  that." 

Another  large  advertiser  was  visited  not  long  ago  by  two 
other  fairly  large  advertisers.  "Why  shouldn't  we  get 
together,"  they  said,  "and  organize  an  agency  which  would 
get  recognition  and  handle  our  accounts  jointly  and  save 
commissions?" 

The  advertiser  had  an  open  mind  and  proceeded  to  look 

into  the  matter.     It  didn't  take  long  to  figure  out  that  a  nice 

saving  would  be  effected,  and  the  visitors  thought 

Need  of  they  had  him  convinced.  "Yes,"  said  he,  "I  can  see 
Knowing  ]^qyq  there  is  an  opportunity  to  pay  less  money,  but 

Agency    ^^^  about  buying  as  much  or  more  service  as  I  now 

Can  Do  get.''  The  varied  business  experience  of  my  agents 
is  a  very  real  asset  —  what  can  this  proposition  put 
up  to  match  it?  Even  if  I  went  into  this  thing,  I  should  still 
feel  that  it  would  be  worth  15  per  cent,  to  have  their  business 
counsel,  so  what  would  I  gain?"  The  visitors  could  not  satis- 
factorily answer  this  and  had  to  say  good-bye. 

This  hints  at  the  widely  prevailing  ignorance  of  what  a  real 
agency  can  do  for  a  manufacturer.  It  is  true  that  agencies 
which  are  capable  of  rendering  real  service  of  such  quality  are 
but  a  handful  compared  to  those  calling  themselves  agents  and 
boasting  of  "expert"  service,  but  who  are  unable  to  "deliver." 

Some  advertisers  spending  large  sums  of  money  are  particu- 
larly tinged  with  the  idea  that  no  agent  can  render  15  per 
cent.'s  worth  in  service.  An  advertiser  spending  $400,000 
a  year  said  to  an  agent  some  time  ago:  "Fifteen  per  cent, 
on  my  account  is  $60,000  a  year.  Will  you  please  particularize 
what  you  propose  to  do  for  me  to  earn  such  a  sum?"  and  he 
glued  his  eyes  so  hard  upon  physical  services  that  he  couldn't 
see  the  15-per-cent.  idea  of  able  advisory  service  by  far 
the  most  important.  He  is  still  placing  his  account  at  a  cut 
rate  which,  due  to  the  agent's  decreased  cost  of  doing  business, 
is  a  rate  considerably  below  what  he  was  paying  six  years 
ago.     His  "service"  is  necessarily  in  keeping. 


536       ADVERTISING  AS  A  BUSINESS  FORCE 

The  growing  number  of  large  national  advertisers  who  are 
paying  15  per  cent,  is  a  matter  of  wonder  to  cynics;  but  if 
they  were  able  by  a  telegram  to  summon  two  such  able  and 
experienced  men  as  one  15  per  cent,  advertiser  can  and 
does  frequently,  and  use  several  days  of  their  time  in  conference, 
in  salesmen's  conventions,  in  directors'  meetings,  in  district 
organization,  even  in  factory  organization,  as  well  as  secure 
such  deep-going  reports  on  fundamental  conditions,  they  would 
see  a  new  light  on  agency  service. 

If  it  is  true  that  90  per  cent,  of  the  national  advertising 
reaching  American  publications  goes  through  an  agent,  then 
a  careful  study  of  agency  conditions  and  costs  is  the  business, 
nay,  the  duty,  of  all  advertising  men.  As  the  standard  of 
service  increases,  it  becomes  increasingly  important  to  dis- 
criminate between  the  sheep  and  the  goats  among  the  agents. 
The  day  has  gone  by  when  the  advertiser  could  sit  back  in  his 
chair  and  say,  "Oh,  the  publisher  pays  the  agent  the  com- 
mission —  that  is  a  matter  that  doesn't  concern  me  —  it  doesn't 
come  out  of  my  pocket." 

The  fact  is,  notwithstanding  the  illusion  of  a  commission 
paid  by  publisher  to  agent,  it  is  the  advertiser  who  pays  the  bill 
in  its  entity.  And  it  is  distinctly  a  part  of  the  advertiser's 
business  to  know  that  he  is  getting' what  he  is  paying  for.  A 
broader  understanding  of  the  basic  facts  by  advertisers 
will  result  in  doing  away  with  many  of  the  existing  abuses, 
will  strengthen  the  hands  of  the  best  agencies  and  result  in  a 
general  toning-up  of  the  entire  industry. 


CHAPTER  XVI 

CONCLUSION 

BEFORE  attempting  to  suggest  a  few  general  lines  of 
thought  running  through  this  compilation  there  are  two 
points  which  ought  to  be  made. 

1.  Advertising  is  just  beginning  to  find  itself.  Not  only  ad- 
vertisers, but  also  the  whole  commercial  world,  is  beginning 
to  grasp  the  meaning  of  what  advertising  has  done,  and  of 
what  it  may  reasonably  be  expected  to  do.  New  uses,  as 
well  as  new  forms,  for  advertising  are  constantly  being 
discovered. 

2.  The  appreciation  of  the  power  of  advertising  has  led  to 
a  recognition  of  the  dangers  of  its  abuse.  This  recognition 
is  beginning  to  find  legal  expression. 

NEW   USES   FOR   ADVERTISING 

In  this  compilation  we  have  confined  our  attention  to  the 

operation  of  advertising  in  the  handling  of  goods  for  sale  at 

,,     ^^      retail.     This  we  have  done  for  the  sake  of  clearness. 

jVcW)  U  S6S 

But  the  '  Much  of  what  has  been  said  may,  with  little  change, 
Same  \)q  ^sed  in  analyzing  problems  in  the  handling  of  mer- 
chandise on  a  large  scale,  and  many  of  the  principles 
apply  even  to  the  sale  of  things  not  ordinarily  classed  as  mer- 
chandise. City  "boosting"  is  not  merchandise  selling  in  any 
strict  sense  of  the  term,  and  yet  many  of  the  principles  underly- 
ing analysis  of  the  "goods,"  and  of  the  "market,"  and  even  of 
the  "distribution  system"  will  apply  to  this  relatively  new 
advertising  field.  Suppose  we  look  at  a  few  cases  of  city  ad- 
vertising with  a  view  to  seeing  how  the  general  principles  of 

537 


538        ADVERTISING  AS  A  BUSINESS  FORCE 

advertising  as  a  business  force  apply.  Lucius  E.  Wilson,  vice- 
president  and  general  manager  of  the  Warren  Motor  Car  Com- 
pany, of  Detroit,  made  an  address  before  the  Dallas  meeting  of 
the  xA.ssociated  Advertising  Clubs  of  America  in  which  he  spoke 
of  city  advertising  as  follows: 


*Obviously,  a  display  advertisement,  suflBciently  interesting 

to  induce  the  reader  to  drop  into  the  corner  drug  store  and 

buy  a  bottle  of  tooth  paste,  would  not  be  convincing 

What  City  enough  to  impel  the  same  reader  to  terminate  existing 
Advertising ,        .  i    .  •  .11  i     i  j  j    •     u      1 

Must  Do   busmess  relations,  wrap  the  household  goods  m  burlap, 

and  journey  to  a  totally  new  field  of  operations  where 
the  eternal  problem  of  getting  three  meals  a  day  must  be  solved 
in  new  ways.  City  advertising  is  very  naturally  slower  in 
obtaining  results  than  is  any  other  kind  of  publicity  yet  dis- 
covered. 

Memphis,  Tenn.,  and  Des  Moines,  la.,  have  been  making 
a  consistent  and  persistent  effort  to  use  display  space  as  a 
factor  in  an  all-around  booster  movement.  One  city  is 
approaching  its  fourth  year;  the  other  is  near  its  third.  The 
experiences  of  both  have  been  singularly  alike. 

The  first  returns,  that  is,  the  first  letters  received  in  response 
to  the  advertising,  were  froth,  not  cream.  Some  of  the  boosters 
in  both  cities  lost  heart  early  in  the  campaign,  because  they 
thought  everything  that  rises  to  the  top  is  cream.  The  real 
invigorating,  life-giving  beverage  did  not  appear  until  after  the 
foam  had  been  blown  away  by  a  year's  campaign.  There  was 
enough  sparkling  sizz,  however,  in  the  returns  of  the  first  year 
to  compensate  with  novelty  whatever  might  have  been  lacking 
in  stability.  Fortunately,  both  Memphis  and  Des  Moines  had 
made  their  financial  arrangements  for  a  period  of  at  least  two 
years,  had  contracted  for  advertising  space  during  that  time, 
and  could  not  quit.  Like  the  Irishman  with  the  wildcat,  they 
needed  help  to  let  go. 

Copy  was  run  regularly  in  the  World's  W^ork,  the  Saturday 
Evening  Post,  and  Everybody' s  Magazine  in  the  Des  Moines 
campaign.  Memphis  included  a  number  of  trade  papers  and 
localized  her  campaign  in  some  cases  by  the  use  of  daily  papers 
in  a  few  large  cities. 

*Printers  Ink,  June  6,  1912,  p.  55. 


CONCLUSION  539 

When  Memphis  wanted  a  furniture  factory  she  sent  James 

S.  Warren  to  Grand  Rapids,  and  he  opened  on  the  city  with 

Hmo      Quarter  and  half -page  ads  in  the  Grand  Rapids  papers. 

Memphis  Yes,  it  created  some  excitement.      I  happened  to  be 

Got  a  there  at  the  time.  The  Grand  Rapids  Board  of  Trade 
Furniture  ^^s  disturbed.     There  was  a  good  deal  of  running  to 

tactory  ^^^  ^^^  'Yhe  name  of  Memphis  was  on  the  lips  of  men 
who  had  not  thought  of  the  city  in  twenty  years.  After  reading 
some  of  the  cleverly  worded  stories  of  her  advantages,  I  heaved 
a  sigh  and  wondered  why  men  had  not  discovered  Memphis 
before. 

And  while  on  the  subject  of  Memphis  let  me  say  that  Judge 
Floyd,  speaking  before  the  American  Association  of  Commercial 
Executives,  in  answer  to  a  request  to  tell  the  results  of  his 
campaign,  said: 

"I  can  only  quote  Dun  and  Bradstreet.  Memphis  seciu-ed  something  like 
fifty  manufacturing  concerns;  something  like  seventy-five  wholesale  and  jobbing 
concerns,  and  other  concerns  of  various  kinds,  amounting  to  640  new  business 
enterprises  in  all.  Now,  that  was  not  all  directly  the  result  of  our  work, 
but  it  was  the  result  of  the  activity  we  created.  It  kept  there  in  Memphis 
a  great  many  people  who  would  have  gone  away.  It  stimulated  our  own 
people  and  inspired  a  number  of  new  people  from  the  outside." 

The  latter  part  of  Judge  Floyd's  statement  goes  to  the  very 
heart  of  municipal  advertising. 

For  instance :  I  know  that  the  effect  in  Des  Moines  upon  her 
own  citizens  was  worth  more  than  the  campaign  cost.  You 
may  ask  why?  Because  it  is  worth  anything  to  arouse  a  com- 
munity from  a  comatose  condition  into  a  spirit  of  enterprise. 
The  spirit  of  a  city  is  the  city.  As  Paul  said  to  the  Romans: 
"Be  ye  transformed  by  the  renewal  of  your  minds."  Des 
Moines  could  never  have  been  revived  without  a  complete  re- 
newal of  her  mind.  And  it  is  a  startling  fact  that  every  year 
subtracted  from  her  banks  a  larger  sum  of  money  for  Western 
investment  than  was  devoted  to  business  expansion  at  home. 

What  would  you  think  of  an  Eastern  city  that  sent  more  of 

its  surplus  wealth  beyond  the  horizon  than  she  kept 

Invest-      Q^  home.'*      What  would  happen  to  the  boosters  in 

Population  ^^^  Angeles  if  every  man  in  their  city  invested  a 

dollar  in  Hawaii  each  time  that  he  put  fifty  cents  into 

Los  Angeles  business  or  property? 

But  Des  Moines'  troubles,  before  the  advertising  era,  were 
not  confined  to  the  loss  of  her  capital.    Where  the  money  went, 


540        ADVERTISING  AS  A  BUSINESS  FORCE 

Iowa  families  followed,  because  a  man's  feet  and  his  pocket- 
book  insist  on  remaining  in  the  same  neighborhood.  They 
cannot  be  separated  for  long.  The  paper  is  read  more  com- 
fortably under  the  light  of  the  evening  lamp  if  the  man  knows 
that  his  property  is  safely  bestowed  just  across  the  block.  This 
is  human  instinct,  and  must  be  considered  in  handling  city 
advertising.  Just  as  long  as  the  people  of  Iowa  remained  fas- 
cinated by  the  glamour  of  sudden  prosperity  just  over  the  sum- 
mit of  the  Rocky  Mountains,  it  was  hopeless  for  Des  Moines  to 
expect  to  grow  into  the  stature  of  a  real  city. 

So  the  first  accomplishment  of  a  well-directed  city  advertising 
campaign  is  to  give  a  community  an  honest  pride  in  itself.  I 
know  personally  there  were  hundreds  of  men  in  Des  Moines 
who  came  downtown,  after  reading  the  first  city  advertisements 
in  the  magazines,  carrying  a  new  inspiration  to  attempt  some- 
thing worth  while  right  there  at  home. 

A  wholesaler  told  me  confidentially  that  his  business  had 

practically  doubled  in  the  space  of  a  year  and  a  half  without 

increasing  his  territory  a  foot  and  without  the  addi- 

Eow      ^Jqjj  Qf  g^  single   salesman.      This   highly   profitable 

^Grtw^  growth  could  not  be  attributed  to  the  policy  of  the 
firm  or  the  cleverness  of  its  management,  because  the 
same  firm  and  the  same  management  had  existed  many  years 
without  the  growth. 

A  manufacturer  of  suspenders  told  me  that  his  traveling  sales- 
men never  used  to  get  a  fair  hearing  in  the  state  of  Iowa.  The 
samples  could  be  laid  on  the  merchant's  counter,  the  salesman 
tell  his  little  story,  and  everything  proceed  swimmingly  until 
the  fact  was  disclosed  that  the  goods  were  made  in  Des  Moines. 
Then  the  Iowa  merchant  would  lose  interest,  because  he  re- 
garded Des  Moines  as  only  a  clumsily  enlarged  edition  of  his  own 
town;  because  he  believed  Des  Moines  manufacturers  to  be  only 
slightly  different  from  himself,  and  utterly  unable  to  furnish 
him  with  the  designs,  the  goods,  and  the  prices  that  came  from 
the  larger  markets  of  Chicago  and  St.  Louis. 

The  city  advertising  campaign  went  far  in  changing  the  at- 
titude of  Iowa  toward  her  capital  city.  As  soon  as  Des  Moines 
began  to  think  well  of  herself  —  to  think  so  well  of  herself  that 
she  felt  impelled  to  spend  $12,000  a  year  telling  about  it  in 
national  mediums,  the  rest  of  Iowa  took  a  new  observation 
and  concluded  that  her  capital  city  was  worth  while.  The 
relation  of  Iowa  to  Des  Moines  was  given  a  new  slant.     Des 


CONCLUSION  541 

INIoines  wholesalers  and  Des  Moines  mannfacturcrs  capitalized 
this  regard  for  their  location. 

Other  cities  are  using  various  forms  of  publicity  to  encourage 
growth  and  extend  trade.  Several  hundred  chambers  of  com- 
merce are  now  publishing  regularly  monthly  or  weekly  boosters' 
bulletins.  Other  organizations  arrange  trips  by  club  members 
to  industries  within  the  city  and  to  promising  trade  territory 
outside.  Like  all  other  advertising  campaigns,  no  city  should 
use  display  space  until  the  follow-up  material  is  ready.  The 
follow-up  for  a  city  involves  an  intelligent  survey  of  the  busi- 
ness, social,  religious,  and  industrial  community;  a  compilation 
of  a  tremendous  mass  of  data;  its  conversion  into  readable 
shape  and  its  publication  with  attractive  illustrations.  Reason- 
why  copy  and  the  same  kind  of  follow-up  is  the  only  variety  that 
can  be  tolerated  in  city  advertising. 

The  money  for  city  advertising  has  come  from  various  sources. 
Undoubtedly,  the  most  satisfactory  funds  have  come  from 
voluntary  contributions,  more  or  less  spontaneously  obtained. 
Atlantic  City's  council  offered  $5,000  to  their  convention  bureau. 

fjig  The  proffer  was  declined,  because  the  bureau  did  not 
Sources  of  want  to  entangle  itself  with  politics.  Charleston,  S.  C, 
Funds  for  has  an  unusual  appropriation  of  $6,000  for  publicity. 
Advertising  Winnipeg  last  year  appropriated  $25,000.  The 
differentiation  between  publicity  and  advertising  in  the  use  of 
city  funds  has  never  been  drawn  sharply  in  these  cases. 

City  advertising  has  been  a  success  or  a  failure  according  to 
the  unit  of  measurement  used  in  determining  the  decision. 
Some  men  in  Memphis  will  tell  you  that  every  one  of  the  fifty 
manufacturing  concerns  mentioned  by  Judge  Floyd  came  to 
Memphis  of  their  own  volition.  The  connection  between  the 
cause  and  the  result  is  so  intangible  that  it  is  missed  by  many 
observers.  As  a  matter  of  fact,  it  would  be  absurd  to  allege 
that  advertising  pulled  fifty  factories  to  Memphis.  The  fac- 
tories came  because  they  wanted  to,  but  they  wanted  to  come 
because  they  knew  more  good  of  Memphis;  because  they  saw 
more  profit  to  themselves  in  Memphis  than  in  any  other  place. 

Whether  the  display  advertising  came  under  the  manager's 
eye  and  molded  his  thinking,  or  whether  it  shaped  a  new  reputa- 
tion for  Memphis  in  the  mind  of  casual  associates,  which  after- 
ward galvanized  the  manager  into  action,  is  wholly  immaterial. 
Somebody  had  to  say  something  good  about  Memphis  before 
the  reputation  for  enterprise  might  be  born.     If  this  good  were 


542        ADVERTISING  AS  A  BUSINESS  FORCE 

stated  in  ink  on  paper  and  multiplied  a  million  times  by  the 
printing  press,  it  is  logical  to  conclude  that  it  was  result- 
ful.     .     .     . 

RAILWAY   ADVERTISING 

Not  the  least  among  the  new  developments  of  advertising 

is  the  realization  of  some  of  its  possible  uses  in  railway  work. 

The  largest  single  appropriation  for   advertising  in 

^UseTof  ^^^^  y^^^  ^^^^  ^'^^  ^^^^^  o^  t^^  Harriman  Lines,  and 
^dpcrimn^  virtually  all  of  this  appropriation,  amounting  to 
$1,362,911,  was  spent  in  advertising  the  Harriman 
railroads  and  the  country  through  which  these  lines  pass.  The 
way  this  appropriation  was  spent  is  described  by  Charles  W. 
Hurd  as  follows : 

*The  fourteen  railroads  making  up  the  gigantic  Union  Pacific- 
Southern  Pacific  System,  with  its  20,000  miles  of  tracks,  nearly 
one  tenth  of  the  entire  trackage  of  the  United  States,  spent 
$1,362,911  for  advertising  during  the  past  fiscal  year,  and  prac- 
tically all  of  it  was  for  straight  printers'  ink.  If  the  appropria- 
tions of  its  allies,  the  Illinois  Central  and  Central  of  Georgia, 
were  included  the  sum  would  be  many  thousands  larger. 

All  last  week  the  advertising  representatives  of  these  rail- 
roads sat  around  the  board  in  a  parlor  of  the  Hotel  Belmont, 
New  York  City,  and  went  over  every  piece  of  advertising  matter 
that  had  been  issued  during  the  year,  and  there  were  hundreds 
and  thousands  of  them,  from  a  newspaper  page  and  an  outdoor 
display  to  souvenir  postcards  and  time-folders. 

The  big  purpose  of  the  campagin  was   decided  long   ago. 

As   Gerrit   Fort,   passenger  traffic    manager   of   the 

T'/'e       Union  Pacific  and  Oregon  Short  Line,  told  Printers^ 

of^hT  ^^^^^  ^^^^  year,  it  is  "  to  people  the  empire  of  the  West  — 
Campaign  the  filling  up  of  the  fertile  lands  in  Colorado,  Wyo- 
ming, Utah,  Idaho,  California,  Oregon,  Montana, 
Washington,  and  Nevada." 

The  ways  and  means  of  doing  this  were  also  long  ago  de- 
cided :  the  newspaper  and  magazine  campaign  is  complemented 
by  almost  every  type  of  promotion,  including  moving-picture 
shows  and  lectures. 

*Printers'  Ink;  July  4,  1912,  p.  26. 


CONCLUSION  543 

The  whole  gamut  of  appeal  is  covered.  The  public  appetite, 
whetted  by  local  and  general  publicity,  is  transformed  into  a 
craving  by  an  almost  inexhaustible  stream  of  books  and  book- 
lets, filled  with  pictures  and  descriptions  of  the  wonders  of  the 
Western  land  and  the  inquiries  are  followed  up  with  action- 
provoking  letters. 

It  is  a  good  deal  of  an  undertaking  to  keep  track  of  all  this 
literature  and  bring  it  up  to  100  per  cent,  efficiency,  to  know 
where  to  expand  the  appropriation  and  where  to  cut  off,  when 
to  go  forward  and  when  to  halt,  when  to  let  the  imagination 
run  riot,  and  when  to  get  down  to  cold-blooded  analysis. 

Little  things  like  words  and  pictures  and  borders  and  typog- 
raphy are  big  things  when  they  help  or  hinder  an  impression, 
and  particularly  a  million  or  ten  million  impressions.  They  are 
the  details  or  some  of  the  details  which  go  to  make  up  the  whole. 

So  the  advertising  representatives  of  these  sixteen  railroads 
get  together  once  a  year  and  go  over  the  whole  situation,  taking 
a  fresh  view  of  their  problem,  reviewing  their  resources,  and 
then  coming  at  last  to  the  little  details  which  they  cannot  afford 
to  despise. 

It  is  one  of  the  most  remarkable  examples  of  organized  ef- 
ficiency in  the  advertising  field.  The  pressure  to  carry  out  the 
great  policies  inaugurated  by  the  late  Mr.  Harriman  and  his 
associates  has  been  transmitted  to  these  men  and  they  have 
drawn  upon  railroad  practice  for  ideals  of  method.  The  results 
speak  for  themselves  and  every  advertising  man  will  no  doubt 
be  interested  in  knowing  what  they  are. 

The  biggest  single  item  of  this  million  and  a  third  is  for 
newspaper  advertising.  This  runs  up  into  the  hundreds  of 
thousands,  some  of  it  paid  out  at  a  rate  higher  than 
How  the  ^^Q  commercial  rate,  though  the  reason  for  the 
Was  Svent  liigher  rate  has,  in  the  opinion  of  the  railroad  men, 
passed  with  the  order  of  the  Interstate  Commerce 
Commission  against  paying  advertising  bills  with  transpor- 
tation. 

The  next  highest  expense  is  for  general  advertising  by  electric 
signs,  billboards,  etc.  —  about  $177,000. 

These  "etceteras"  include  also  such  things  as  cuts,  designs, 
dining-car  menus,  dodgers,  excursion  matter,  exhibits  for  fairs 
and  expositions,  flowers  for  the  city  officers,  hangers,  photo- 
graphs, negatives,  enlargements,  souvenirs,  stationery  for 
trains,  stereopticon  machines  and  slides  and  expenses  incident 


544        ADVERTISING  AS  A  BUSINESS  FORCE 

to  advertising,  such  as  boxing  for  shipment  cases,  expenditures 
of  commissary  department  on  account  of  advertising,  etc. 

Booklets  and  leaflets  consume  about  $175,000.  Many  of 
these  booklets  are  exceedingly  handsome  and  are  among  the 
finest  examples  of  the  printer's  art  for  work  of  this  character. 

Periodicals  also  figure  in  a  large  way  in  the  advertising 
appropriation. 

Time-folders,  which  might  be  described  as  time-tables 
with  a  college  education,  since  they  embrace  art  and  literary 
features,  distinguishing  them  from  the  common  or  garden 
variety  of  folders,  and  are  therefore  advertising  mediums,  cost 
$110,000. 

The  lecture  bureau  which  works  both  with  and  without 
moving-picture  shows,  and  acts  as  a  distributor  for  much  of 
the  literature,  took  $35,000  to  support  it. 

Industrial  promotion,  under  which  head  is  listed  the  expense 
of  following  up  the  inquiries  elicited  by  the  advertising,  called 
for  some  $21,000. 

Wall-maps,  containing  advertising  literature,  are  debited  with 
$10,000. 

All  of  the  advertising  details  are  discussed  at  this  general 
meeting  and  all  of  the  estimates  framed  here,  but  the  appropria- 
tions are  made  and  spent  by  the  individual  roads,  each  feeling 
itself  free  to  act  according  to  its  best  interests  as  it  sees 
them.     .     .     . 

Put  in  the  more  formal  way  —  the  way  that  the  railroad 
men  see  it  themselves  —  the  method  of  handling  the  adver- 
Checkinq  tising  of  the  System  is  as  follows: 

Up  the  All  advertising  is  separated  under  special  heads, 
Expendi-  known  as  advertising  accounts. 

tures  Expenditures  under  these   accounts  as  compared 

with  previous  years  are  reported  monthly  to  the  New  York 
office  on  a  large  blank  form  of  minute  divisions  and  subdi- 
visions. 

At  the  close  of  the  fiscal  year  statement  of  expenditures  under 
each  account  compared  with  previous  fiscal  year  is  reported.  An 
estimated  appropriation  for  ensuing  year  is  requested. 

At  the  close  of  each  fiscal  year  a  meeting  of  the  chief  passenger 
traffic  office  is  held,  at  which  all  advertising  issued  by  each  of 
the  related  lines  during  that  year  is  criticised  and  given  by  vote 
a  percentage  as  to  quality. 

In  order  to  have  this  material  ready  for  the  annual  meeting. 


CONCLUSION  545 

each  line  sends,  for  criticism,  as  soon  as  issued,  each  piece  of  Its 
advertising  matter  to  each  of  the  other  Hnes. 

To  each  piece  of  Uterature  is  attached  a  form  showing  cost, 
issues,  distribution,  etc.,  and  columns  for  voting  percentages 
and  ballot  sheets  and  statement  of  order  of  criticism  of  adver- 
tising matter.     Percentages  are  derived  from  an  agreed  basis. 

Newspaper  advertising  copy  is  clipped  from  publications  in 
which  it  appears,  pasted  in  sample  books  with  specimen  sheets 
of  newspapers  showing  position,  and  is  considered  as  a  whole  at 
the  annual  meeting. 

At  the  same  meeting  sample  photographs  and  advertising 
pictures  and  novelties  are  considered  as  a  whole,  a  general 
docket,  previously  prepared,  embracing  subjects  submitted  by 
each  line,  is  discussed,  and  special  advertising  campaigns  are 
presented  by  agencies,  promoters,  and  others.  Appropriation 
requests  and  all  expenditures  are  there  gone  over,  prepared 
in  consolidated  form,  and  submitted  to  director  of  traffic  for 
consideration  and  approval. 

The  advertising  meeting,  as  it  is  called,  is  part  of  a  large 
meeting  of  all  the  traffic  officials  of  the  System.  The  findings 
and  estimates  of  the  advertising  representatives  go  up  to  the 
passenger  traffic  managers,  are  discussed  by  them,  and  are 
then  reported  to  the  presidents  of  the  roads.  The  joint  re- 
sponsibility ceases  at  this  point.  The  individual  boards  of 
directors  settle  their  own  appropriations  and  it  is  spent  after 
their  own  fashion.  But  the  influence  of  the  joint  meeting  is 
naturally  strong,  and  is  effectual  in  making  the  thought  and 
action  of  the  members  more  or  less  uniform. 

While  the  advertising  meeting  is  regularly  attended  by  the 
advertising  representatives,  it  is  also  participated  in  to  a  large 
degree  by  the  passenger  traffic  managers,  who  recognize  adver- 
tising as  one  of  their  strongest  supports,  and  keep  in  as  close 
touch  as  possible  with  advertising  ideas.     .     .     . 

There  is  nothing  dull  about  these  advertising  meetings.  The 
prose  is  all  in  the  figures.  The  System  rides  its  system  like  a 
hobby. 

At  one  of  the  meetings,  for  instance,  one  of  the  Southern 
Pacific  booklets  came  up  for  criticism.  Mr.  DeHaven  is  in  the 
chair.  He  is  no  longer  connected  with  the  System,  but  his 
thirty-six  years  of  railway  associations  and  his  familiarity  with 
all  things  advertising  have  kept  him  in  the  chair  one  meeting 
more. 


546        ADVERTISING  AS  A  BUSINESS  FORCE 

The  slip  shows  that  the  booklet  is  Exhibit  No.  107.  It  is  en- 
titled "Sacramento  County,  Calif.,"  but  is  called  Richmond 
because  it  is  designed  chiefly  for  the  Richmond  Industrial 
Commission,  which  gets  fifteen  thousand  copies  of  the  twenty 
thousand  issued,  the  balance  going  to  the  Southern  Pacific 
Company,  including  the  Sunset  Information  Bureau. 

The  blank  also  shows  that  the  cost  of  this  booklet  was 
$2,610.55,  which  amounted  to  $130.53  per  thousand.  To  this 
there  was  contributed  by  the  community  $3,000.  Eighteen 
hundred  dollars  was  diverted  to  Sunset  for  ads  therein. 
The  community  contribution  to  the  cost  of  the  booklet  was 
$1,200;  the  Company's  contribution  was  $1,410.55,  making  the 
cost  to  the  community  per  thousand,  not  including  the  ads  in 
Sunset,  $60,  and  the  cost  to  the  Company  per  thousand  $73.50. 

These  figures  are  given  only  for  the  purpose  of  showing  how 
elaborate  is  the  data  in  this  connection.  The  cost  of  art  work, 
engraving,  manuscript,  paper,  printing,  incidentals  are  also 
given  in  detail;  the  date  of  ordering,  the  date  of  delivery,  and 
the  name  of  the  publisher. 

Mr.  DeHaven  looks  at  his  list  of  names  and  says:  "We  will 
hear  Mr.  Smith  first." 

Mr.  Smith  reads  off  his  list  for  "Richmond."  He  rates  the 
cost,  has  something  to  say  on  the  necessity  and  the  manner  of  dis- 
tribution, and  awards  percentages  of  various  kinds.  He  would 
have  thought  more  highly  of  the  beautiful  cover  had  the  title 
of  the  building  pictured,  "The  State  Capitol  at  Sacramento," 
been  in  some  other  ink  than  black  on  green;  the  contrast  was 
not  strong  enough,  he  thinks.  He  also  criticises  the  use  of  light 
broad  borders  around  the  halftone  cuts.  Some  of  the  cuts  are 
too  black,  some  too  light,  and  in  others  the  arrangement  is  poor. 

It  is  plain  that  there  is  nothing  perfunctory  about  the  dis- 
cussion. The  System  works,  it  draws  out  and  stimulates  instead 
of  discourages  the  exchange  of  experience.  It  puts  the  meeting 
on  wheels  and  furnishes  rails  for  it  to  run  on,  and  it  is  a  pleasure 
for  all  to  do  business  that  way. 

Afterward  comes  the  vote  and  the  registration  of  the  vote. 

The  booklet  is  90  or  95,  or  some  other  percentage. 

Recorded  Then  another  piece  is  taken  up  and  so  on   through 

"  on^"^    ^^^  ^^^^  ^^  newspaper  and  magazine  advertisements. 

Mediums  photographs  or  outdoor  display,   hangers,    souvenir 

post-cards,  etc.     There  is  a  long  list,  but  there  is  little 

chance  of  its  being  tiresome,  when  the  subject  matter  varies  so 


CONCLUSION  547 

frequently,  and  the  standards  of  comparison  and  criticism,  too. 
Besides,  eight  days  of  it  are  more  agreeable  than  twenty-five  or 
more,  as  in  the  older  time. 

Eight  days  set  apart  —  a  month  "if  necessary"  —  by  "big 
business"  for  the  full  discussion  of  advertising,  past  and  present, 
by  its  advertising  and  business  heads  and  the  transaction  of  a 
month's  business  in  that  time  —  these  are  some  things  for  ad- 
vertising men  to  think  about. 

CREATING  PUBLIC  SENTIMENT 

Another  feature  of  railroad  advertising  will  be  found  in  the 

story  of  the  Hudson  &  Manhattan  Railroad  and  the  way  it  has 

exploited  the  service   through   its   tubes   under  the 

Using     Hudson,  while  at  the  same  time  it  has  developed  on 

J\.(LV0TllSltXQ  fl       1  •  PC*  1 

to  Win  the  part  of  the  public  a  very  strong  teelmg  ot  triend- 
FrienSd^  ship  toward  the  corporation.  It  is  part  of  the  policy 
of  this  company  to  take  the  public  into  its  confidence 
in  matters  in  which  the  public  should  be  concerned.  For  ex- 
ample, not  long  ago  the  company  found  it  necessary  to  raise  the 
fare  on  one  of  its  divisions  from  5  cents  to  7  cents.  This  was 
a  40  per  cent,  increase  and  it  might  be  expected  to  raise  opposi- 
tion. 

The  ordinary  railway  practice  in  putting  an  Interstate  rate 
into  effect  is  to  file  the  rate  with  the  Interstate  Commerce 
Commission  according  to  law.     If  there  is  objection  to  the  rate 
filed  with  the  Commission,  the  rate  may  be  suspended 
Advertising  ^^^  ^^^  railroad  obliged  to  establish  its  reasonableness. 
Per  Cent.       When  the  question  of  announcing  this  new  rate 
Incimse    ^^o^e,  the  publicity  policy  of  the  company  was  put 
to  a  supreme  test.     Wm.  G.  McAdoo,  president  of 
the  company,  describes  the  results  of  this  advertising  achieve- 
ment as  follows: 

*The  same  old  question  of  policy  presented    Itself:  should 
we  anticpiate  the  public's  objection  by  Immediately  giving, 

*World's  Work,  March  1912,  p.  579. 


548        ADVERTISING  AS  A  BUSINESS  FORCE 

in  line  with  our  practice,  a  full  statement  of  our  reasons 
for  the  increase,  or  should  we  (following  the  usual  railroad 
custom)  simply  file  our  tariff,  and,  if  a  protest  was  filed,  meet 
it  then  with  a  statement  of  the  facts? 

Without  hesitation  we  decided  to  issue  immediately  a  full 
statement  and  to  publish  it  (notwithstanding  the  large  cost)  as 
an  advertisement  in  the  daily  papers  of  New  York  City  and 
vicinity. 

Our  policy  has  been  based  upon  the  consistent  belief  that  the 
public  is  reasonable  —  as  reasonable  as  the  average  individual. 
This  is  not  the  view  of  most  corporation  managers.  They  have 
acted  too  much  upon  the  hypothesis  that  the  public  is  i^nreason- 
able.  It  is  a  mistake.  The  public  is  wwreasonable  only  when 
it  is  uninformed.  It  is  often  vitally  affected  by  corporate 
action,  but  rarely  does  the  corporation  manager  make  it  ac- 
quainted with  the  facts  upon  which  alone  rational  and  intelli- 
gent opinion  may  be  founded.  He  would  rather  establish  his 
position,  or  do  the  thing  in  hand  so  long  as  he  believes  he  has  the 
right,  without  the  labor  of  explanation,  even  though  it  involves 
the  loss  of  popular  approval.  Why?  Because  it  is  less  trouble 
and,  anyway,  what  can  the  public  do  about  it?  He  does  not 
realize  that  in  the  arbitrary  exercise  even  of  undeniable  rights, 
the  consequences  of  public  disfavor  and  ill-will  are  far-reaching, 
manifesting  themselves,  at  times,  in  unexpected  quarters  and 
upon  unrelated  subjects,  to  the  great  injury  or  disadvantage  of 
the  corporation. 

Even  where  the  corporation  has  an  undisputed  right  to  do  a 
thing  —  particularly  if  that  thing  vitally  affects  the  public  —  it 
is  far  better  to  accomplish  it  with  than  ivithout  the  favor  and 
approval  of  the  public.  There  is  no  corporation,  however 
strong,  whose  property  and  assets  are  not  enhanced  in  value  and 
made  more  secure  by  possession  of  the  good-will  and  friendship 
of  the  public.  This  is  merely  common-sense,  or  "enlightened 
self-interest,"  so  called. 

And  so  we  set  out  to  convince  the  public  that  the  increase  of 
rate  was  just  and  reasonable. 

Besides  the  advertisement  before  referred  to,  we  issued  and 
distributed  to  passengers  on  our  trains  a  small  pamplilet  in 
which  we  compared  the  convenience,  speed,  and  cost  of  trans- 
portation from  New  Jersey  to  uptown  New  York  by  way  of  the 
tubes  with  the  facilities  formerly  available,  including  the  neces- 
sary change  from  ferry  to  street  cars,  consequent  delays,  and 


CONCLUSION  549 

total  cost  of  eight  cents.  We  then  explained  at  length  why  the 
five-cent  rate,  that  we  had  been  charging  for  the  superior  ser- 
vice, had,  after  three  years'  trial,  failed  to  earn  fixed  charges. 
"For  these  reasons,"  continued  the  pamphlet,  "it  has  been  de- 
cided to  increase  (beginning  December  24,  1911)  the  rate  be- 
tween Jersey  City,  Hoboken,  and  Sixth  Avenue,  or  uptown 
New  York,  to  seven  cents."  After  pointing  out  that  "it  is 
needless  to  comment  on  the  fact  that  the  earning  or  fixed  charges 
is  absolutely  essential,"  the  pamphlet  concluded:  "We  sub- 
mit the  facts  with  the  hope  that  the  justness  of  the  company's 
position  will  be  recognized,  and  with  the  behef  that  the  public 
is  willing  to  support  an  enterprise  that  has  been  consist- 
ently managed,  from  the  beginning,  in  the  public 
Howjke    interest."^ 

Responded      Immediately  letters,  mostly  commendatory,  began 
to  come.     The  following  will  serve  to  illustrate  the 
temper  and  attitude  of  the  general  traveling  public : 

My  Dear  Sir:  A  fair  and  just  recognition  of  the  convenience  of  the  Hudson 
River  Tubes  should,  it  seems  to  me,  entirely  justify  in  the  public  mind  the 
proposed  increase  in  fare  for  the  uptown  service. 

Frederick  W.  Kelset. 

Dear  Sir:  I  wish  to  congratulate  you  on  your  card  of  November  22d. 
I  believe  that  the  public  will  accept  your  explanation  and  accept  the  raise  of 
fare  cheerfully.  Railroad  corporations  so  often  raise  their  rates  without 
even  recognizing  that  the  public  exists,  consequently  the  public  are  offended. 
When  a  railroad  president  takes  the  trouble  and  expense  to  explain  things  of 
this  kind  to  the  public  it  is  apt  to  please  them. 

Your  road  thus  far  practically  does  all  it  can  to  accommodate  the  public 
with  comfort  and  I  think  you  have  its  good-will. 

George  H.  Hull. 

Dear  Mr.  McAdoo:  Your  circular  of  November  21st  issued  to  the  public 
regarding  the  raise  in  rates  to  uptown  New  York,  via  the  Hudson  Tube, 
carefully  noted,  and  I  wish  to  say  that  I  consider  you  are  perfectly  within 
your  rights  in  making  this  increase  in  rate  as  you  are  most  certainly  entitled 
to  at  least  10  per  cent,  profit  over  the  operating  expenses  of  your  enterprise. 

In  view  of  the  matter  therefore  as  set  forth  in  your  pamphlet  of  November 
21st,  I  do  not  see  how  any  one  can  conscientiously  object  to  this  raise,  par- 
ticularly in  view  of  three  facts: 

(1)  That  even  at  a  fare  of  7  cents,  we  are  making  the  trip  cheaper  than  the 
old  way  of  car  and  ferry; 

(2)  We  are  saAdng  about  two  thirds  of  the  time  taken  up  in  going  by  the 
old  route; 

(3)  That  the  old  service  by  car  and  ferry  is  not  to  be  compared  with  the 
excellent  service  given  in  the  Hudson  Tubes, 


550        ADVERTISING  AS  A  BUSINESS  FORCE 

From  one  who  admires  very  much  the  enterprise  which  you  have  put  through 
and  one  who  appreciates  very  much  the  added  comfort  to  travel  that  your 
Tube  affords. 

A.  E.  Willis. 

Deak  Sir:  Noting  your  adv.  — you  are  worrying  about  the  wrong  thing. 
The  people  of  New  York  and  vicinity  are  with  you  to  a  man.  They  and  I 
will  cheerfully  pay  any  fare  you  ask. 

R.  J.  Cald\\t;ll. 

Deab  Sib:  I  am  in  receipt  of  your  circular,  issued  November  21,  1911, 
in  regard  to  your  proposed  increase  in  fare.  It  seems  to  me  that  the  reasons 
set  forth  in  your  circular  are  entirely  sufficient  —  and  I  also  think  that  you 
are  handling  it  in  the  right  manner  in  giving  the  reasons  to  the  public  before 
putting  in  the  tariff. 

W.  J.  Harahan. 
{A  Vice-President  of  the  Erie  Railroad.) 

Dear  Sib:  Referring  to  your  circular  of  the  21st  instant  addressed  to 
the  public.  You  have  stated  the  position  of  your  Company  very  fairly  and 
squarely  and  the  public  should  consent  to  the  slight  increased  charge  which 
you  propose  making.  The  service  which  you  give  is  excellent  and  should 
be  appreciated. 

Geo.  E.  Hardy. 

Dear  Sir:  I  was  very  much  interested  in  reading  the  public  announce- 
ment of  your  increase  in  rates  as  it  appeared  in  the  papers  this  morning.  I 
desire  to  congratulate  you  upon  realizing  the  necessity  for  placing  these  changes 
upon  a  logical  basis.  In  London,  for  instance,  those  who  ride  a  short  distance 
do  not  pay  as  much  as  those  who  ride  a  long  distance,  and  I  have  wondered 
for  some  time  whether  it  would  be  possible  to  have  an  arrangement  of  that 
kind  in  this  country.  I  think  that  your  presentation  of  the  question  is  a 
clear  and  proper  one. 

S.  H.  Wolfe. 

Dear  Sir:  I  note  your  letter  to  the  public  increasing  rates  on  December 
24,  1911.  As  an  occasional  user  it  seems  to  me  that  you  do  not  calculate 
convenience  sufficiently  high;  that  the  rate  should  be  10  cents  at  least. 

L.  R.  Cow^drey. 

Other  letters  suggested  a  variable  rate  based  on  distance 
zones,  a  discount  on  large  purchases  of  tickets,  and  other 
plans,  most  of  which  had  been  threshed  out  beforehand  and 
abandoned  as  impracticable.  In  every  case,  however,  these 
letters  were  acknowledged  with  explanation  of  the  reasons  why 
the  suggestions  could  not  be  adopted. 

In  addition  to  these  individual  expressions,  formal  action 
of  the  most  gratifying  sort  was  taken  by  various  organized 
bodies  in  New  Jersey.    ,    ,    . 


CONCLUSION  551 

LEGAL   RESTRAINTS   ON    ADVERTISING 

Along  with  a  recognition  of  what  advertising  can  do  toward 
an  honest  stimulation  of  honest  business  goes  an  appreciation  of 
something  of  the  damage  this  power  can  achieve  if  it  is  either 
dishonestly  used  in  an  honest  business,  or  skilfully  used  in  a  dis- 
honest one.  But  since  "honesty  is  only  a  high  dilution  of 
.  honor,"  we  can  go  further  and  say  that  there  is  com- 
the  Honor    ing  to  be  felt  a  need  for  a  higher  code  of  honor  among 

of  the       advertisers    and    the    advertising    profession.     With 
Profession      ,  .  .  i  i-  i      i    •     •  i 

this  sentiment  once  estabnshed,  it  is  only  a  question 

of  a  short  time  until  it  takes  the  form  of  laws,  setting  limits  to 

the  use  of  advertising  for  the  accomplishment  of  dishonorable 

or  dishonest  ends. 

Several  states  have  adopted  and  others  are  contemplating  the 

adoption  of  laws,  following  more  or  less  closely,  the  statute 

drawn  by  an  eminent  legal  authority  for  Printers^  Ink  and 

published  in  that  paper.     (November  23,  1911,  p.  68.)     The 

text  of  this  statute  is  as  follows: 


Any  person,  firm,  corporation  or  association  who,  with  intent 
to  sell  or  in  any  wise  dispose  of  merchandise,  securities,  service, 
or  anything  offered  by  such  persons,  firm,  corpora- 
^        tion  or  association,  directly  or  indirectly,  to  the  pub- 
Suggested  jj^,  f^j.  g^jg  qj.  distribution,  or  with  intent  to  increase 
Advertising  ^^®  consumption  thereof,  or  to  induce  the  public  in 
Laws      any  manner  to   enter   into   any  obligation  relating 
thereto,  or  to  acquire  title  thereto,  or  an  interest  there- 
in, makes,  publishes,  disseminates,  circulates,  or  places  before 
the  public,  or  causes,  directly  or  indirectly,  to  be  made,  pub- 
lished, disseminated,  circulated,  or  placed  before  the  public,  in 
this  state,  in  a  newspaper  or  other  publication,  or  in  the  form  of  a 
book,  notice,  hand-bill,  poster,  bill,  circular,  pamphlet,  or  letter, 
or  in  any  other  way,  an  advertisement  of  any  sort  of  regarding 
merchandise,  securities,  service,  or  anything  so  offered  to  the 
public,  which  advertisement  contains  any  assertion,  represen- 
tation or  statement  of  fact  which  is  untrue,  deceptive  or  mis- 
leading, shall  be  guilty  of  misdemeanor. 


552        ADVERTISING  AS  A  BUSINESS  FORCE 

This  is  the  statute  which  Printers*  Ink  recommends  for  enact- 
ment in  the  various  states  of  the  union  as  a  working  basis  for 
the  elimination  of  dishonest  and  misleading  advertising.  It  is 
an  effort  to  crystallize  the  sentiment  against  fraudulent  adver- 
tising into  small,  definite  compass.  While  it  may  be  possible  in 
some  states  to  secure  the  conviction  of  fraudulent  advertisers 
under  laws  already  existing,  it  is  beheved  that  speedier  and  more 
certain  action  can  be  secured  by  the  enactment  of  this  statute, 
provided  the  advertising  clubs  throughout  the  country  will  make 
it  their  business  to  see  that  the  law  is  enforced  and  not  allowed 
to  become  a  dead  letter. 

Mac  Martin,  of  Minneapolis,  advocates  going  another  meas- 
ure for  securing  legal  control  over  advertising.  He  suggests 
the  appointment  of  state  boards  of  advertising  which  will  per- 
form for  advertising  somewhat  the  same  function  as  the  state 
boards  of  medical  examiners  now  achieve  for  the  medical  pro- 
fession.    Mr.  Martin's  plan  is  outlined  as  follows: 

*I  sincerely  believe  that  every  advertising  man  who  attends 
the  Dallas  Convention  goes  with  the  purpose  of  putting  adver- 
tising on  a  higher  plane  than  it  has  ever  been  before.  But  the 
question  is:  Are  we  going  to  meet  to  pass  a  lot  of  high-sounding 
resolutions  stating  that  we  are  in  favor  of  higher  standards  of 
education  and  honesty;  or  are  we,  at  this  the  eighth  meeting  of 
our  organization,  going  to  develop  some  definite  constructive 
remedy  which  will  make  a  higher  standard  practically  com- 
jpulsory  ? 

The  principal  method  by  which  one  may  become  an  advertis- 
ing man  in  these  days  is  to  admit  it. 

While  we  all  know  that  there  will  never  be  an  "Elwell  on 
Advertising"  the  great  cry  to-day  is  for  standards. 

In  the  great  Educational  Course  of  the  A.  A.  C.  of  A.  we  have 
all  (manager,  solicitor,  agent  and  "special  man,"  and  all  of  us) 
met  on  common  ground. 

Probably  the  chief  reason  for  the  immediate  popularity  of  the 
educational  course  is  because  advertising  men  arc  by  nature 
teachers. 


*  Advertising  and  Selling,  May  1912,  p.  43. 


CONCLUSION  553 

Advertising  is  itself  education.  Advertising  men  know  just 
how  to  go  to  work  to  teach  themselves   and  to  teach  their 

fellows. 
Education  rpj^^  Minneapolis  Advertising  Forum  and  the  St. 
Advertising  Paul  Town  Criers  Club  are  in  favor  of  the  law 
against  fraudulent  advertising  suggested  by  Printers' 
Ink.  We  are  told  that  we  are  the  first  to  respond  to  this  call  for 
"police,"  as  within  four  days  after  the  proposition  was  suggested 
we  appointed  "grievance  committee"  and  se-cured  the  word  of 
our  governor  that  he  would  sign  any  just  law  of  this  kind. 

But  there  must  be  a  standard  of  knowledge  as  well  as  a 
standard  of  honesty. 

Is  there  not  some  plan  whereby  we  can  obtain  both  of  these 
things? 

I  know  that  we  have  all  been  busy  with  this  question  for  years. 

At  the  Omaha  Convention  it  was  prophesied  that  we  would 
all  see  the  day  when  the  universities  of  the  world  would  conduct 
colleges  of  Advertising,  and  when  State  Board  of  Advertising 
would  give  regular  examinations  and  issue  certificates  of  regis- 
traction  similar  to  those  issued  to  doctors,  lawyers,  dentists, 
barbers,  chauffeurs,  and  accountants. 

Many  things  have  happened  in  the  last  two  years. 

The  universities  have  shown  their  willingness  to  co-operate. 
I  am  told  that  fourteen  universities  are  now  conducting  courses 
of  Advertising. 

The  movement  has  grown  to  such  proportions  that  there  is 
hardly  a  section  of  the  country  that  has  not  already  been  drilled 
in  this  educational  work. 

It  is  now  time  to  take  the  next  great  step  —  the  establish- 
ment of  State  Boards  of  Advertising.'' 

We  have  found  in  our  study  in  the  clubs  that  there  are  certain 
fundamental  principles  which  every  advertising  man  should 
know  and  stand  for  no  matter  what  particular  branch  of  the 
business  he  may  be  engaged  in. 

The  holding  of  a  State  Certificate  will,  of  course,  no  more 
signify  a  good  advertising  man  than  it  will  signify  a  good 
doctor,  but  it  will  at  least  distinguish  him  from  the  out-and- 
out  uneducated,  unprincipled  quack. 

No  one  need  at  this  time  be  required  by  law  to  take  such  an 
examination;  but  we  can  make  public  sentiment  demand  it, 
just  as  certified  public  accountants  have  done. 

The  question,  whether  it  would  not  be  better  to   have  the 


554>         ADVERTISING  AS  A  BUSINESS  FORCE 

National  Association  grant  these  certificates,  is  one  which  needs 
careful  consideration. 

We  are  fortunate,  however,  in  having  the  experience  of  other 
lines  of  business  to  draw  upon. 

The  experience  of  the  Certified  Public  Accountants  in  this 
relation  is  most  interesting.  The  attempt  -was  first  made  to 
have  their  National  Association  take  full  charge  of  issuing 
certificates.  While  I  understand  that  this  method  is  still  used 
in  England  I  am  told  that  in  one  state  after  another  certificates 
issued  by  associations  have  proven  unsatisfactory  and  as  far  as  I 
have  been  able  to  learn  there  are  no  associations  of  any  class  of 
business  or  profession  now  issuing  such  certificates. 

I  am  told  that  the  results  are  much  more  satisfactory  under 
the  State  Board  plan,  that  the  influence  of  the  association  of 
clubs  as  a  free  moral  agent  is  increased  and  that  the  public  has 
greater  respect  for  certificates  issued  by  the  state.  The  State 
Board  would  naturally  look  to  the  National  Association  for  sug- 
gestions and  advice  and  to  the  local  clubs  and  universities  under 
the  guidance  of  the  educational  committee  for  the  instruction  of 
applicants. 

While  the  matter  of  granting  certificates  in  the  beginning 
should  be  left  to  the  discretion  of  the  board,  it  has  been  the 
experience  of  others  that  a  proper  standard  demands  at  least 
three  years  of  study  or  three  years  of  experience. 

We  can  make  our  standard  as  much  higher  or  as  much  lower 
than  that  as  we  please. 

The  experience  of  others  has  also  taught  that  the  State  Boards 
should  pass  on  an  applicant's  general  moral  character  and  that 
certificates  of  registration  should  be  revoked  by  the  board  if  the 
holder  is  guilty  of  any  "malpractice." 

The  State  Boards  themselves  could  determine  whether  any- 
thing further  than  an  afiidavit  to  the  effect  that  an  individual 
had  been  for  three  consecutive  years  previous  to  the  establishing 
of  the  board  successfully  employed  in  one  of  the  branches  of  ad- 
vertising, and  recommendation  as  to  the  moral  character  of  that 
individual  and  his  advertising  would  be  sufficient  to  entitle 
those  now  "  in  the  game"  to  be  known  as  Registered  Advertisers. 

It  would  seem  advisable  to  make  these  requirements  very 
elementary  at  first  so  that  every  one  whose  princijjles  entitled 
him  a  certificate  will  apply.  Then  as  our  general  knowledge  of 
advertising  advances  the  examinations  can  be  advanced  as  they 
are  in  every  other  line  of  business  now  registered. 


CONCLUSION  555 

You  may  know  that  my  conclusion  that  the  time  is  now 

ripe  for  State  Boards  of  Advertising  has  not  been  arrived  at 

without  due  deUberation  by  referring  to  the  prophecy 

State      which  I  made  at  the  Omaha  Convention  at  the  time 

Advertising  ^^^  resolution  creating  the  Educational  Committee 

was  adopted. 

After  the  Boston  Convention  I  had  the  honor  of  being  ap- 
pointed by  President  Coleman  on  a  committee  "to  suggest  a 
standard  of  qualifications  for  advertising  men." 

Immediately  on  receiving  this  appointment  I  began  to  make  a 
study  of  the  experiences  of  other  lines  of  business  in  establishing 
such  standards.  At  first  I  thought  that  some  written  code  of 
ethics  might  tend  to  establish  the  basis  of  a  standard,  but  the 
further  the  investigation  progressed  the  stronger  became  the 
proposition  that  the  establishment  of  State  Boards  of  Advertis- 
ing is  the  only  practical  solution. 

A  lawyer  was  then  consulted,  the  forms  of  similar  laws  con- 
sidered, and  a  model  law  for  the  creation  of  State  Boards  of 
Advertising  was  drawn  up,  so  that  we  might  have  some  basis  of 
discussion. 

The  plan  was  taken  up  and  discussed  by  the  directors  of  the 
Minneapolis  Advertising  Forum  and  an  effort  will  be  made  to 
place  this  law  or  a  similar  one  on  the  statute  books  of  the  state 
of  Minnesota  at  the  next  meeting  of  the  legislature. 

I  understand  that  the  proposition  was  also  mentioned  at  the 
recent  convention  of  the  Northwestern  Division  at  Lincoln, 
Neb.,  April  16th,  and  that  a  committee  was  appointed  to  take 
steps  to  carry  it  out. 

I  believe  that  hundreds  of  earnest  men  have  been  thinking 
along  these  same  lines  for  years  and  that  they  will  agree  that  we 
have  nothing  to  gain  by  delay,  or  by  further  temporizing  with 
this  important  question. 

Every  one  admits  that  we  are  losing  millions  of  dollars  every 
year  in  this  country  because  of  lack  of  standards,  of  honesty, 
knowledge,  and  experience. 

The  time  is  now  ripe.     .     .     . 

THE   PROPOSED   STATUTE 

The  full  text  of  Mr.  Martin's  proposed  statute  follows: 

An  act  creating  a  State  Board  of  Advertising,  prescribing  its 
powers  and  duties,  providing  for  examinations  and  issuing  of 


556         ADVERTISING  AS  A  BUSINESS  FORCE 

certificates  of  registration  to  qualified  advertisers  and  providing 
penalties  for  violations  of  the  provisions  of  this  act. 

Be  it  enacted  by  the  Legislature  of  the  state  of  Minnesota: 

Section  1.  That  a  board  of  examiners,  to  be  known  as  the 
State  Board  of  Advertising  is  hereby  created  to  carry  out  the 
purposes  and  enforce  the  provisions  of  this  act.  Said  Board 
shall  consist  of  five  citizens  of  this  state  to  be  appointed  by 
the  governor  and  who,  with  the  exception  of  the  members 
first  to  be  appointed,  shall  be  the  holders  of  certificates  issued 
under  the  provisions  of  this  act  and  shall  hold  office  for  the 
term  of  three  years  and  until  their  successors  are  appointed  and 
qualified. 

The  first  members  of  said  Board  shall  be  skilled  in  the  prac- 
tice of  advertising  and  shall  for  a  period  of  three  years  next  pre- 
ceding their  appointment  have  been  actively  engaged  therein, 
in  this  state,  and  shall  hold  office  for  the  term  of  three  years 
from  the  date  of  their  appointment,  one  for  the  term  of  two 
years  and  two  for  the  term  of  one  year.  The  term  of  office  of  each 
is  to  be  designated  by  the  governor  in  his  appointment,  and  upon 
expiration  of  each  term  of  its  members  the  governor  shall  appoint 
one  member  of  said  Board  as  herein  provided  for  a  term  of  three 
years. 

Section  2.  The  persons  appointed  as  members  of  this  Board 
shall  meet  and  organize  within  thirty  (30)  days  after  their 
appointment.  A  majority  of  said  Board  shall  constitute  a 
quorum.  They  shall  appoint  one  of  their  number  as  chairman, 
another  as  secretary,  and  another  as  treasurer,  or  may  appoint 
one  member  to  serve  as  both  secretary  and  treasurer,  and  said 
officers  shall  hold  their  resj^ective  offices  for  a  term  of  one  year 
and  until  their  successors  are  elected.  In  the  absence  of  the 
chairman  or  secretary  the  Board  may  appoint  a  chairman  pro 
tem.,  or  a  temporary  secretary.  The  affirmative  vote  of  three 
members  of  said  Board  shall  be  considered  as  the  action  of  said 
Board. 

Said  Board  shall  enforce  the  standard  of  special  education  in 
the  art  of  advertising,  the  standard  of  moral  character  and  gen- 
eral experience  as  prescribed  in  this  act  in  all  examinations  con- 
ducted hereunder. 

The  Board  shall  make  rules  and  regulations  for  the  conduct  of 
applicants'  examinations  and  the  character  of  such  examina- 
tions and  scope,  the  method  and  time  of  filling  applications  for 
examinations  and  their  form  and  contents  and  all  other  rules 


CONCLUSION  557 

and  regulations  proper  to  carry  into  effect  the  purpose  of  this  act. 
All  such  examinations  shall  be  conducted  by  the  State  Board 
of  Advertising.  The  time  and  place  of  holding  examination 
shall  be  advertised  for  not  less  than  three  (3)  consecutive  days 
in  one  daily  newspaper,  published  in  each  of  the  counties  where 
the  examinations  are  to  be  held,  and  not  less  than  twenty  (20) 
days  prior  to  the  date  of  each  examination.  The  examinations 
shall  take  place  as  often  as  may  be  convenient  in  the  opinion  of 
the  Board,  but  not  less  than  once  in  each  year.  Said  Board 
shall  keep  records  of  their  proceedings,  an  accurate  list  of  all 
applications  made,  certificates  of  registration  issued,  certifi- 
cates registered  and  certificates  revoked  and  shall  keep  proper 
financial  records  in  which  there  shall  be  entered  a  complete 
statement  of  the  cash  receipts  and  disbursements  of  said 
Board. 

Said  Board  shall  adopt  and  provide  itself  with  a  seal  with  a 
band  inscribed  "Registered  Advertiser"  with  the  coat  of  arms  of 
Minnesota  in  the  centre,  and  said  seal  shall  be  aflSxed  to  each 
certificate  issued  and  registered  under  this  act. 

All  records  of  this  Board  shall  be  open  to  the  inspection  of  the 
public  at  the  office  of  the  secretary  of  the  Board. 

Said  Board  shall  report  annually  to  the  governor  in  the 
month  of  December,  as  follows: 

A.  Its  receipts  and  disbursements. 

B.  Names  of  persons  to  whom  certificates  have  been  issued. 

C.  Names  of  persons  whose  certificates  have  been  revoked. 

D.  Recommendations,  if  any,  for  new  legislation  and  such 
other  matters  as  the  Board  may  deem  proper. 

Section  3.  No  certificates  of  Registered  Advertisers  shall 
be  granted  to  any  person  other  than  a  citizen  of  the  United 
States,  or  person  who  has,  in  good  faith,  duly  declared  his  or 
her  intention  of  becoming  such  citizen,  and  is  over  the  age  of 
twenty-one  (21)  years  and  of  good  moral  character  and  (except 
under  the  provisions  of  section  4  of  this  act)  who  shall  have 
successfully  passed  an  examination  on  such  subjects  as  the 
Board  may  deem  advisable. 

No  person  shall  be  permitted  to  take  such  examinations 
unless  he  shall  for  a  period  of  at  least  three  (3)  years  have  been 
employed  in  the  office  of  an  advertiser  or  shall  have  been  prac- 
tising advertising  on  his  own  account. 

Section  4.  Said  State  Board  of  Advertising  may,  in  its  dis- 
cretion, waive  the  examination  of,  and  may  issue  a  certificate  of 


558         ADVERTISING  AS  A  BUSINESS  FORCE 

Registered  Advertiser  to  any  person  possessing  the  qualifica- 
tions mentioned  in  section  3  of  this  act,  who, 

1.  Is  the  holder  of  a  R.  A.  certificate,  issued  under  the  laws 
of  another  state  which  extends  similar  privileges  to  Registered 
Advertisers  of  this  state,  provided  the  requirements  for  said 
degree  in  the  state  which  has  granted  it  to  the  applicant  are,  in 
the  opinion  of  the  State  Board  of  Advertising,  equivalent  to 
those  herein  provided;  or  who, 

2.  Shall  be  the  holder  of  a  degree  of  Registered  Advertiser  or 
the  equivalent  thereof,  issued  by  any  foreign  government,  pro- 
vided that  the  requirements  for  such  degree  are  equivalent  to 
those  herein  provided  for  the  degree  of  Registered  Advertiser, 
or  who, 

3.  For  more  than  three  (3)  consecutive  years  next  preceding 
the  passage  of  this  act  shall  have  been  practising  advertising  in 
this  state  on  his  own  account  and  who  shall  apply  in  writing  to 
the  Board  for  such  certificate  within  one  year  after  the  passage 
of  this  act. 

Section  5.  Any  person  who  has  received  from  the  State  Board 
of  Advertising  a  certificate  of  his  qualifications  to  practise  as 
a  Registered  Advertiser  as  herein  provided  shall  be  known  and 
styled  a  Registered  Advertiser;  and  no  other  person,  and  no 
partnership,  all  of  its  members  who  have  not  received  such  cer- 
tificate, and  no  corporation,  shall  assume  such  title  or  the  title 
of  Registered  Advertiser  or  the  abbreviations  "R.  A."  or  any 
other  words,  letters  or  abbreviations  tending  to  indicate  that 
the  person,  firm  or  corporation  so  using  the  same  is  a  Registered 
Advertiser. 

Section  6.  Said  State  Board  of  Advertising  shall  charge,  for 
each  examination  and  certificate  provided  for  in  this  act,  a 
fee  of  twenty-five  ($25)  dollars  to  meet  the  expenses  of  such 
examination.  This  fee  shall  be  payable  by  the  applicant  at  the 
time  of  making  his  initial  application,  and  shall  not  be  refunded, 
and  no  additional  charge  shall  be  made  for  the  issuance  of  a 
certificate  of  registration  to  any  applicant. 

From  the  fees  collected  under  this  act,  the  Board  shall  pay 
all  expenses  incident  to  the  examinations,  hearings  and  expense 
of  issuing  certificates  of  registration,  traveling  expenses  of  the 
members  of  the  Board  while  performing  their  duties  under  this 
act ;  provided  that  no  expenses  occurred  under  this  act  shall  be 
a  charge  against  the  funds  of  this  state. 

The  members  of  said  State  Board  of  Advertising  shall  be 


CONCLUSION  550 

paid  all  necessary  expenses  occurred  in  the  performance  of  their 
duties  under  this  act. 

Section  7.  Said  State  Board  of  Advertising  may  revoke  any 
certificate  of  registration  issued  under  this  act  or  may  cancel  the 
registration  under  this  act  for  bad  moral  character,  dishonesty, 
conviction  of  crime,  incompetency  or  unprofessional  conduct; 
provided  a  written  notice  shall  have  been  mailed  to  the 
holder  of  such  certificate  at  least  twenty  (20)  days  before  any 
hearing  thereon,  stating  the  cause  for  such  contemplated 
action  and  appointing  a  time  and  place  for  a  hearing  thereon 
by  the  State  Board  of  Advertising,  and  further  provided 
that  no  certificate  of  registration  under  this  act  shall  be  re- 
voked until  an  opportunity  for  such  hearing  shall  have  been 
afforded. 

At  all  hearings  the  Attorney-General  of  this  state,  or  one  of 
his  Assistants  designated  by  him,  shall  attend. 

Certificates  of  Registration  issued  and  registered  under  this 
act  shall  be  surrendered  to  the  State  Board  of  Advertising  on 
their  revocation  by  said  Board. 

Section  8.  Any  violation  shall  be  a  "gross  misdemeanor." 

Section  9.  This  act  shall  take  effect  and  be  in  force  from  and 
after  its  passage. 

CONCLUSION 

It  has  been  the  purpose  of  this  compilation  to  call  attention 
to  a  few  of  the  many  aspects  of  advertising  as  a  force  in  the 
creation  and  control  of  business. 

The  problems  of  the  organization  and  conduct  of  business  are 
not  by  any  means  reducible  to  fixed  laws.  But  an  orderly 
study  of  these  problems,  and  of  the  methods  which  have  been 
evolved  for  their  solution,  is  worth  while.  For,  if  we  take  a  suf- 
ficiently large  number  of  cases,  we  can  usually  find  running 
through  them  common  features  which  are  worth  careful  con- 
sideration. 

It  will  be  the  purpose  of  these  final  paragraphs  to  call  at- 
tention to  a  few  of  the  many  such  generalizations  which 
might  be  deduced  from  the  cases  contained  in  the  foregoing 
discussions. 


560         ADVERTISING  AS  A  BUSINESS  FORCE 

Modern    advertising   has    reached  the   stage   of  "exacting 
appHcation."     If  we  look  at  the  stages  of  development  through 
which    almost   any   of    the    important   applied    forces    have 
passed  we  see  some  points  of  similarity.     First  of  all,  there 
is  the  stage  of  uncertainty  and  resulting  charlatan- 
Praltice    ^^"^ '  ^^^  *^^^  ^^  have  the  stage  of  crude  application 
Has      where  the  good   begins  to   separate  itself  from  the 
ExTcting  valueless;     the    third    stage    represents    intelligent 
application  of  the  crude   ideas  which  have   slowly 
worked  out  from   the  previous  stages  of  development;  and, 
last  of  all,  we  have  a  stage  in  which  no  application  is  accept- 
able which  is  merely  good  —  only  the  best  can  possibly  con- 
tinue to  exist. 

Electricity  as  a  motive  power,  radio  activity,  almost  every 
branch  of  applied  science,  shows  this  same  general  char- 
acter of  development.  Advertising  as  a  business  creating  and 
directing  power  is  approaching,  if  it  has  not  already  entered, 
this  fourth  stage,  in  which  its  own  friends  are  becoming  ex- 
tremely exacting  of  it  as  a  means  for  accomplishing  its  des- 
tined ends. 

Those  who  are  interested  in  the  use,  and  development,  of 

this  demand-modifying-power  have  come  to  insist  on 

Demands  many  things  which  only  a  short  time  ago  were  not 

on        seriously  considered  in  connection  with  it.     Among 
Advertising   .  ,  i  •  •  i  i 

these  new  demands  on  advertising  three  may  be  par- 
ticularly mentioned: 

1.  Immediate  contact  with  selling. 

2.  Accurate  knowledge  as  a  basis  for  action,  and 

3.  Exacting  standards  of  honor. 

1.  Contact  with  selling. — Throughout   this   compilation  we 

Advertising  ^^ve  aimed  to  emphasize   the    intimate  connection 

and  Dis-  between  nearly  all  types  of  advertising  designed  to 

n  u  ion  gi^iujuiate  business  in  goods  for  retail  sale  and  the 
sales  which  are  expected  to  follow  the  advertising  activity. 
The  classification  of  fields  for  preliminary  work  in  laying  out 


CONCLUSION  561 

any  advertising  campaign  —  examination  of  the  goods,  a  study 
of  the  market,  a  thorough  knowledge  of  distribution  methods 
—  simply  illustrates  one  of  the  ways  in  which  advertising  ac- 
tivity is  more  and  more  obliged  to  adjust  itself  to  the  demands 
made  upon  it  as  a  sales-creating  force. 

2.  Accurate  knowledge  as  a  basis  for  advertising  effort.  —  The 
commercial  world  is  still  far  from  the  position  which  it  would 

like  to  occupy  in  the  matter  of  having  acquired  accu- 
Knowledge  rate  information  on  which  advertising  activities  can  be 
, ,  /^'■.  based.  But  there  are  many  things  which  the  adver- 
tiser,  his  manager,  or  his  agents  may  know  to-day 
with  absolute  certainty,  which  were  closed  to  him  only  a  com- 
paratively few  years  ago. 

They  may  know  far  more  about  the  goods  which  they  are 
advertising  than  they  could  know  even  a  decade  ago.  They 
may  know  vastly  more  about  costs  of  production,  costs  of  dis- 
tribution, qualities,  standards,  and  the  adjustment  of  these  to 
fluctuations  in  demand. 

They  may  know  much  more  about  markets  than  they  ever 
could  before.  They  may  become  fairly  well  informed  as  to  the 
location  of  markets,  the  character  of  markets,  the  portion  of 
various  population  bodies  which  can  be  considered  as  a  market. 
There  are  coming  to  be  generally  available  many  forms  of 
market  data  which  even  a  few  years  ago  were  entirely  inac- 
cessible. 

They  may  know  far  more  about  distribution  than  ever  before. 
The  capabilities  of  one  form  of  distribution  or  another  —  its 
limitations,  its  possibilities.  Methods  of  studying  these  are 
being  improved  constantly,  and  in  a  large  measure  the  growing 
difficulties  of  distribution,  which  have  arisen  out  of  the  changes 
in  the  size  and  methods  of  many  factors  in  distribution,  have 
been  offset  by  the  increased  knowledge  of  what  those  changes 
actually   are. 

3.  Advertising  honor.  —  If  these  data  are  becoming  accessible 
to  the  advertiser,  to  his  manager,  and  his  agent,  many  of  them 


5Q^         ADVERTISING  AS  A  BUSINESS  FORCE 

are  also  becoming  accessible  to  the  consumer,  and  to  all  the 
others  to  whom  the  advertising  appeal  is  to  be  made.     It  does 

not  require  the  gift  of  prophecy,  then,  to  foresee  the 
TheHmor  ygj.y  imminent  coming  of  the  time  when  the  very 
Profession    highest    possible  standards  of  honor  in  advertising 

appeal  will  not  merely  be  "good  business"  but  will 
be  absolutely  essential  to  any  advertising  appeal  which  can  be 
expected  to  have  any  real  effect. 


THE   END 


INDEX 


Advertising,  Effects  on  unad- 
vertised  goods,  59-61. 
Porter,  G.  Q.,  59 

National  Carpet  Sweeper  Com- 
pany, 59 
Advertising,   Local    linked    to 
National,  63-65 
Pancoast,  Chalmers  Lowell,  63 
Advertising  and  Selling,  265-267 
Gibbs,  E.  D.,  265 

National    Cash    Register    Com- 
pany, 265 
Advertising  and  Selling,  Pre- 
liminary Analysis,  46-54. 
Collins,  Jr.,  Clarkson,  A.,  46 
Advertising  Cost,  Disposal  of, 

429-434 
Advertisability,     Development 
of,  57-59 
Werheim,  W.  P.,  57 
Colgate  &  Co.,  57 
Huyler,  58. 

National  Biscuit  Company,  57 
Pratt  &  Lambert,  58 
"61"  Floor  Varnish,  58 
Towle's  Log  Cabin  Syrup,  58 
Uneeda  Biscuit,  57 
Agency,  Advertising,  Business, 

494 
Agency,   Advertising,    Cost   of 

doing  business,  528-534 
Agency,  Advertising,  Character 

of  service,  507-513 
Agency,  Advertising ,  Future  of, 
524 
Markward,  Frank,  524 
Agency,  Advertising,  Increased 

cost,  528 
Agency,  Advertising,  Number, 

493 
Agency,  Advertising,  Payment 
of,  513 
Houston,  H.  S.,  522 
Mahin,  John  Lee,  513 
N.  Y.  A.  A.-~  "Message,"  619 


Agency,  Advertising  Problems, 

493-496 
Agency,  Advertising,  Relation 
to     advertising     manager, 
516-519 
Harn,  0.  C.,516 
Agency,     Advertising,      Space 
buying,  497-499 
Wakeman,  J.  R.,  498 
Agency,  Advertising,  Trade  aid, 
502-507 
Cherry,  W.  B.,  502 
Handley,  William,  505 
Shumway,  Franklin  P.,  506 
Agency,  Advertising,  Work  of, 
^  500 

Freeman,  A.  B.,  500 
Agents,  Advertising,  National 

Association,  519 
Analysis  for  advertising.  Dis- 
cussion, 23-26 
Tipper,  Harry,  23 
Analysis  for  advertising.  Expe- 
rience, 20-23 
Ward,  W.  B.,  20 

Ward  Baking  Co..  20 
Analysis  for  advertising.  Meth- 
ods of,  7-20 
Fowler,  R.  E..  7 
Murphy,  Carroll  D.,  16 
Wadsworth,  Gerald  B.,  13 
Anti-Substitution  Copy,  108 


Chain  Stores,  Direct    buying, 

34 

Austin,  Nichols  &  Co.,  Contro- 
versy with  Kellogg  Toasted 
Corn  Flake  Co.,  35 

Kroeger  Grocery  &  Baking  Co., 
34 

Procter  &  Gamble,  34 
Chain  Stores,  Jobbing  methods, 

32 

Butler,  James,  32 


563 


564 


INDEX 


City  Boosting  Methods,  538-542 
Wilson,  Lucius  E.,  538 
Des  Moines,  la.,  53S 
Memphis,  Tenn.,  535 
Competition,  Vacuum  Cleaner 
Advertising,  267-273 
Simpson,  Roy  B.,  267 
Vacuum  Cleaners,  267 
Consumer,  Back  to  the  tailor, 

103 
Consumer,  Changed  relations, 
89 
Carver,  T.  N.,  92 

Stetson  Shoe  Company,  91 
Consumer,  Co-operation,  110 

Hurd,  Charles  W.,  110 
Consumer,  Defences.      1  Lim- 
ited spending  power,  93,  95 
Consuraer,  Defences.  2  Savings 
instinct,  93,  95 
Wright,  Lynn,  6.,  95 

Encyclopaedia  Britannica,  95 
Consumer,  Defences.    3  Stand- 
ards of  living,  93,  98 
Warren,  Waldo  P.,  98 
Consumer,  Defences.     4  Price 
habits,  93,  100 
Field,  Marshall,    Co.,  100 
Consumer,  Defences,  5  Buying 
habits,  93,  102 
King,  A.  Rowden,  103 
Consumer,  Defences,    6  Dupli- 
cation of  appeals,  93-107 
Horr,  H.  N.,  107 

Chesebrough  Manufacturing  Co., 

Vaseline,  108 
Dioxogen,  108 

Horlick's  Malted  Milk  Co.,  108 
Oakland     Chemical     Company, 

Dioxogen,  108 
Pond's  Extract,  108 
Vaseline,  108 
Consumer,  Elevated  purchase 

standards,  93,  98 
Consumer,  Stimulated  wants, 

93,95 
Consumer,  Value  of  advertised 
goods,  113 
Barnes,  H.  W.,  113 
Costs ,  Advertising ,  Absorbed  by 
selling  reductions, 454-458 
Page,  G.  H.,  m 


Costs,    Advertising,    Account- 
ant's treatment,  453-454 
Florence  Mfg.  Company,  453 
Ingersoll,  Robert  H.,  &  Bro.,  453 
Standard  Oil  Company,  454 
Welch  Grape  Juice  Company,  454 
Costs,    Advertising,    Paid    by 
consumer,  429 
Lord,  George  Frank,  ^^ 
Costs .  Advertising ,  Paid  by  non- 
advertising  competitor,  429 
Costs ,  Advertising ,  Social  value ; 
458-460 
Grigg,  C.  L.,  ^58 

Dealer  Help,  Cost  accounting, 

147 
Casey,  C.  C,  1^7 

Mayfield   Dairy   Company,    155 

Simmons  Hardware  Co.,  152 

United  Cigar  Stores  Co.,  153 
Dealer  Help,  Dealer  Literature. 

134-140 
Byrnes,  Garrett,  13Jf 
Dealer  Help,  Selling  system,  144 
Pickett,  Kirk  S.,  lU 

Sealshipt  Oysters  Company,  Sales 
System,  144 
Dealer  Help,  Window   display, 

140 
Hansen,  Ellis,  HO 

Victor  Talking  Machine,  140 
Dealer  Help,   Six  days'   diary, 

134-140 
Demand  and  Distribution,  61- 

63 
Ingersoll,  Wm.  H.,  61 

Ingersoll,  Rob.  H.,  &  Brother,  61 
Department     store.     In    New 

York  market,  159 
Department  Stores,  see  retailer 
Direct    Sale,    Advertising    as- 
pects, 288 
Direct  Sale,  Manufacturer  to 

consumer,  289 
Direct  Sale,  Manufacturer  to 

retailer,  288 
Distribution,  Chaos,  30-36 

Gage,  Raymond  W.,  30 
Family  of  Products,  339-344 
Fashion  and  Advertising,  283 


INDEX 


565 


Holman,  Frank  H.,  283 

"Maline,"  283 
Free  Deal,  36 

Diamond  Match  Company,  36 
Free  Deals,  Condemned,  251 

Good- will.  Analysis  of,  449 

Good- will,  Outlay  for,  448 

National  Biscuit  Company,  4J;8 

Good-Will,  Relation  to  adver- 
tising, 442-453 

Good- will.  Value  of,  442 

Goodrich  Rubber  Co.,  444,  446 
Loose-Wiles    Biscuit    Company, 

444 
May  Company,  444 
Royal  Baking  Powder  Company, 

444,  446 
Sears,  Roebuck  &  Company,  444 
Studebaker  Mfg.  Company,  444 
Underwood     Typewriter     Com- 
pany, 444 
Woolworth  Company,  444 

Jobber,  Changed  services,  206 
Jobber,  Elimination,  35 
Jobber,  Elimination    by   con- 
sumer appeal,  242-248 
Hunt,  J.  H.,  21^2 

Hunt  Brothers  Co.,  242 
Scott,  Arthur  H.,  2U 

Scott  Paper  Company,  244 
Jobber,  Elimination 

Drygoods, 208 
Jobber,  Forcing  to  sell,  239 
"Pee-Kay"  Campaign,  239 
Jobber,  Grocery.    Defence,  214 

Wilson,  Arthur  M.,  2H 
Jobber,    Grocery    trade.      De- 
fended  by   manufacturer, 
248-252 
Ross,  Andrew,  2^.8 

Kellogg    Toasted    Corn    Flakes 
Company,  248 
Jobber,  Price  maintenance, 

252-255 
Jobber,  Private  brands,  34,  220 
Barney,  P.  R.,  220 
Wabash   Baking   Powder   Com- 
pany, 222 
Hammesfahr,  A.  C,  22^. 
Roth.  S.  W.,  225 


Jobber,    Private    brand.      Re- 
clamation from,  228-232 
Hill,  Frank  T.,  228 

General  Roofing  Company,  228 

Jobber,  As  product   exploiter, 
232-235 
Hurd,  Charles  W.,  232 

American  Kitchen  Products  Co., 

"Steero,"  235 
Shieffelin  &  Co.,  235 
Steero,  235 

Jobber,  Profits,  211 

Ingersoll,  RobertH.&  Brother,  213 

Jobber,  Relations  with  manu- 
facturer, 236 

Jobber,  Substitution  by,  217 

Jobbing,  by  retailers,  31 
Field.  Marshall,  &  Co.,  31 
Wanamaker,  John,  31 

Legal  restraints.    Advertising, 
549 

Magazines,  The  national  medi- 
ums, 71 

Manager,  Advertising.    Co-op- 
eration with  sales,  487-492 
Collins,  James  H.,  487 

Manager,  Advertising.    Equip- 
ment for,  475-487 
DeWeese,  Truman,  A.,  Jt75 
Ashbroke.  Herbert  G.,  482 
Cleary,  F.  X.,  483 
DeWeese,  Truman,  A.,  483 
Dobbs,  S.  C,  484 
Ford,  Harry,  485 
Harn,  O.  C,  482 
Holmes,  R.  A.,  483 
Howland,  Ellis,  485 
Lewis,  E.  St.  Elmo,  486 
Metzger,  George  P.,  485 
Proudfit,  Herbert,  483 
Regan,  Marquis,  485 
Simpson,  Roy  B.,  484 
Wheeler,  W.  W.,  485 
Winningham,  C.  C,  484 

Manager,    Advertising,    Func- 
tion of,  465-471 
Johns,  Wm.  H..  ^65 
Jones,  Charles  E.,  1^71 

Manager,     Advertising,     Sales 
training  for,  461-464 
Snell,  Myrtle  Tower,  ^61 


566 


INDEX 


Managers  .Advertising ,  Associa- 
tion of,  516 

Manufacturer,  Production  and 
advertising,  257-265 
Wright,  Lynn  G.,  25S 
Crane,  William  Company,  Sales 

and  Production,  258 
Fairbank,  W.  K.  Co.,  259 
Sherwin-Williams  Company,  260 

Manufacturer,  Profit  margin, 
434 

Manufacturer,  Sales  campaign 
and  advertising,  261-265 
King,  A.  Rowden 

Anheuser-Busch  Co.,  262 
Waterman,  L.  E.  Company,  264 
Williams,  J.  B.,  Soap  Company, 
261 

Manufacturer,  sale  to  retailer 
32 

Heinz,  H.  J.,  &  Co.,  32 
Fisk  Manufacturing  Co.,  33 
National  Biscuit  Co.,  33 

Manufacturer's  Agents,  279 

Mediums,  Space-buying  prob- 
lems, 497-499 

Mediums,  Advertiser's  ability 
78 
Collins,  Jas.  H.,  78 

Mediums,  Expenditures  for,  68 

Mediums,     Linking     national 
and  local,  74 

"Message  to  Publishers,"  519 

Methods  of  Advertising,  79-87 
King,  A.  Rotvden,  80 
Carnation  Milk,  80 
Pacific  Coast  Condensed,  80 

Newspapers,   Improved  adver- 
tising methods,  68 

"No-Quantity-Price" 

Kellogg  Company  advocates,  251 

Out-of-Door  Advertising, 
Standardization  of,  72 
National  Poster  Advertisers'  As- 
sociation, 72 

Package,  Value  of,  50 
Price,  Maintenance,  279 
Price,  Maintenance,  Advertis- 
ing aspects,  380-385 
Johnson,  Roy  W.,  380 


Big  Ben  alarm  clock,  384 

Bissell  Carpet  Sweeper,  383 

Dover  sad-irons,  385 

Gillette  razor,  385 

Ingersoll,  R.  H.,  &  Bro.,  386,  391 

Kops  Bros.,  382 

Price,      Maintenance,      Argu- 
ments against,  402-409 
Bowers,  Duke  C,  402 
Macy,  R.  H.,  &  Company,  404 

Price  Maintenance,  Arguments 
favoring,  399-402 
Nash,  Frederick  W.,  399 

Fischer,  B. ,  &  Company,  399 
Hotel  Astor  CofiFee,  399 

Price  Maintenance,  Consumer 
attitude,  420,  427 
Kaminsky,  Louis,  JfW 

Makeman  Tablet  Company,  420 

Price     Maintenance,     Efiects, 
422-428 
Jones,  L.  B.,  ^2k 

Eastman    Kodak  Company,  424 

Price  Maintenance,  Jobber,  at- 
titude, 252-258 
Baldwin  Acetylene  Lamp,  252 
Simmons,  John,  Company,  252 

Price  Maintenance,  Legal  as- 
pects, 409-412 
Dick  Mimeograph  Case,  412 
Miles  vs.  Park,  408 

Price      Maintenance,     Patent 
hearings,  390 
Dover  Mfg.  Co.,  391 
Fair  (The)  and  Others,  394 
Ingersoll,  Robert  H.,  &  Brc,  391 
Kellogg     Toasted     Corn     Flake 
Company,  391 

Price   Maintenance,  Retailers, 
opinions,  396-398 
Eastman,  R.  0.,  396 

Price  Maintenance,  Retailer  at- 
titude, 413 

Eastman  Kodak  Company,  413 
Holman,  Frank  //.,  1^16 

Price    Maintenance,   Table-  of 
prices,  386 

Printers'   Ink  Statute,  551 

Private  brand,  jobber,   34 
Austin  Nichols  &  Co.,  35 
Leggett,  F.  H.,  &  Co.,  (Premier), 
34 


INDEX 


567 


Product,  families,  339-344 
Profit,    Margin    of    Manufac- 
turer's, 434 
Profit,  Margin  of  Retailer's,  434 
Profit,  Margin  of  Wholesaler's, 

434 
Protection  of  goods,  in  adver- 
tising, 280-283 
Gage,  R.  W.,  280 
"Tiz,"  280 
IProtection  of  Goods,  On  the 
market,  273-280 
Johnson,  Roy  W.,  273 
Colgate  &  Company,  278 
Columbia  Graphophone  Co.,  279 
Gillette  Razor  Company,  279 
Dunlap  Hats,  279 
Ingersoll,  Robert  &  Brother,  277 
Johnson  Chemical  Company,  275 
Kellogg  Toasted  Corn  Flake  Co., 
277 

Quantity  Price,  36 
Babbitt  Soap  Co.,  36 
Diamond  Match  Co.,  36 
Kellogg  Toasted  Corn  Flake  Co. 
36 

Railway  Advertising,  542-547 
Hurd,  Charles  W.,  541 
Harriman  Lines,  541 
McAdoo,  Wm.  G.,  5^7 

Hudson  &  Manhattan  Railroad 
Railway  Advertising,  547 
Retailer,  Ability  to  substitute, 
49-44 
Louis,  George  L.,  ^0 
Retailer,  Advertising  Effect  on 
stock,  37 
Cherry,  Walter  Bernard,  37 
Retailer,  Changed  Functions, 

119-121 
Retailer,  Chain  Stores,  172 
Whelan,  George  J.,  172 
United  Cigar  Stores  Company, 

172 
United  Stores  Realty  Co.,  177 
Retailer,  Chain  Store,  Drygoods 
business,  187 

Associated  Merchants'  Company, 
188 


Claflin,  H.  B.,  Company,  188 
Singer  Sewing  Machine  Co.,  192 
United  Drygoods  Company,  188 
Washington  Shirt  Co.,  192 

Retailer,  Chain  store,  Proposed 
grocery  combination,  193 

Retailer,  Mail-order,  195 

Retailer,  Chain  stores,  Spread 
of  idea,  183 
Lambert,  S.  C,  183 

Atlantic  &  Pacific  Tea  Company, 

186 
Browning,  King  &  Company,  186 
Huyler's  Stores,  185 
Music  Trades,  191 

Retailer,  Co-operative,  For  per- 
formance of  common  vsrork, 
203 

Retailer,  Co-operative,  Owner- 
ship of  jobbing  house,  201 
Beinert,  C.  E.,  201 

National  Retail  Grocers'  Associa- 
tion, 201 

Retailer,  Co-operative,  Owner- 
ship of  factory,  197 
Neilly,  Wm.  C,  197 

United  Drug  Company,  197 

Retailer,  Department  store,  157 

Retailer,     Department     store, 
Creation  of  individuality, 
167 
Easton,  Robert,  167 

Altman,  B.,  &  Co.,  169 

Retailer,  Department  store, 
Entrance  to  national  mar- 
kets, 159-167 
Hotchkin,  W.  R.,  159 
Brill,  Samuel,  165 
Gimbel    Bros.,    Entering    New 

York  market 
Holeproof  Hosiery,  165 

Retailer,  Profit-margin,  434 

Retailer,  Profits  and  help,  128- 
134 
Lockwood,  R.  Bigelow,  128 
Crisco,  128 
Ivory  Soap,  132 
Procter  &  Gamble,  128,  132 

Retailer,  Small,  As  an  outlet, 
121 
Louis,  George  L.,  121 
Six  Manufacturers,  121 


568 


INDEX 


Retailers,  Grocers,  capital  of, 

400 
Retailers,  Grocers,  number  of, 

400 
Retailing,  by  jobbers,  31 

Park  &  Tilford,  31 

Claflin,  H.  B.,  31 
Retailing  by  manufacturer,  31 

Browning,  King  &  Co.,  31 

Selling   cost.   Composition  of, 
436 
Frederick,  J .  George,  ^36 
Benjamin,  Alfred,  439 
Hart,  Schaffner  &  Marx,  438,  439 
Kuppenheimer,  B.  &  Co.,  439 
Peck,  Samuel  \\.,  &  Co.,  439 
Selling  Cost,  Place  of  advertis- 
ing, 440 
Selling  Organization,    292 

National  Cash  Register,  292 
Selling  Policy,  Advertising  as- 
pects, 288 

Kentucky  Wagon  Co.,  289 
Rogers  -  Thompson  -  Givernaud, 
288 
Selling    Points,    Selection    of, 
54-57 
Gibson,  Hamilton,  ijli 
Selling  and  Advertising  Depart- 
ments, 296-329 
Thrift,  Tim,  S96 
American  Multigraph  Sales  Co., 
29G 
Manning,  F.,  SH 

Grape  Products  Co.,  314 
Nash,  Frederick  W.,  307 
Heinz  Co.  (H.  J.),  307 
Lockwood,  R.  Bigeloic,  301 
National  Lead  Co.,  301 
Caf!cy,  Charles  C,  311 
Eddy,  Clayton  A.,  3U 
Dovst,  H.  P.,  336 
State    Boards    of    advertising, 
552 
Martin,  Mac,  552 
Street    Railway    Cards,    Some 

grocery  users,  72 
Street  Railway  Cards,   Stand- 
ardization, of  72 
Street  Railway  Advertising  Com- 
pany, 72 


Substitution ,  A  suggested  cure , 
107-109 
Horr,  H.  M.,  107 

Trade-mark  problems,  372-378 
Alle7i,  II.  L.,  372 

Belding  Bros.,  376 

"Celluloid,"  376 

"Cravenette,"  375 

"Heatherbloom,"  376 

Hyde,  A.  G.  &  Sons.  376 

Reuter  &  Co.,  374 

Samson  Cordage  Co.,  377 

'•Sterling'  Ale,  374 
Trade-marks,    Defensive,   333- 

338 
Garrison,  W.  W.,  333 

"Boy  Scout,"  333 

"Non-Shrinkable,"  335 
Trade-marks,    Legal    aspects, 

344-358 
Goddard,  Arthur  E.,  3J!,'t 

Kodak.  353,  376 

Matzoon,  346 

Vaseline,  353,  376 
Fawcett,  Waldon,  350 

Uneeda,  347,  351 
Trade-mark,  selection,  358-363 
DeWolff.  Jerome,  358 

Bon  Ami,  360 

Bliss,  Fahyan  &  Co.,  359 

Ripplette,'^359 

Seersucker,  359 

"Walk-over,"  362 
Trade-mark,  selection,  332 
Farrar,  Frederick  Arnold,  332 

Adams  &  Elting,  332 
Trade-marks,   In   Textile   sell- 
ing, 363-372 
Latshair,  S.  R.,  363 
Emery.  Joseph  II.,  368 

Lord  &  Taylor,  368 

"Onyx"  Hosiery,  36S 
Trade-marks, Product  families, 

339-344 
Allen,  H.  L.,  3',0 

Colgate  &  Co.,  343 

Com  Products  Co.,  340 

Glidden  Varnish  Co.,  340 

Johnson  &  Johnson,  343 

Rubberset  Co.,  341 

Smith  Co.,  J.  Hungerford,  343 


INDEX  569 

Trade-marks,  Value  of,  351  Shackamaxon   Guaranteed   Fab- 

Trade-marks,    Woolen   manu-  rics,  J.  A.  Keim  &  Co    104 

facturers,  103  Stein.  S.,  &  Co..  105 

Keim,  J.  A.,  &  Co.,  Shackamaxon,  Willis,  W.  P.,  &  Co.,  106 

^^  Wholesale ,  Profit  margin ,  434 


Tbhe  Country  Life  Press 
Garden  City,  N.  Y. 


